Photo taken in Dublin, Ireland
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As the OECD’s deadline for finalizing major reforms to the global tax system draws near, the Irish government recently opened a public consultation on the deal as it considers its future.
Ireland is notably one of the holdouts on the agreement, which has seen some 131 countries sign up to the deal that includes setting a 15% minimum corporation tax rate globally. The OECD aims to finalize the agreement in October.
Any changes to that rate could have serious implications for Ireland as a destination for foreign investment and for receipts at the exchequer.
The Dublin government estimates that changes to its tax rate could lead to 2 billion to 3 billion euros in lost tax revenue every year.
Finance Minister Paschal Donohoe has voiced support for reforms of the international system generally, but stops short of agreeing to a minimum rate.
“Ireland is broadly supportive of the agreement but signaled a reservation in the respect to a commitment to a rate of ‘at least 15%’ for a global minimum effective tax rate,” a spokesperson for the Department of Finance told CNBC in a statement.
James Stewart, adjunct associate professor in finance at Trinity College Dublin, said that the consultation is likely a delaying tactic to see how things shake out stateside before making any decision. U.S. President Joe Biden, who has championed the reforms, will need to get the measures passed through Congress.
“Even if you get a whole array of opinions, what will the department do with those? They’re not binding and they’ve had other consultations before,” Stewart said on Ireland’s consultation.
Ireland has long attracted scrutiny of its tax regime, most infamously in its affairs with Apple.
There have been gradual changes over the years to the global tax landscape that have affected Ireland’s tax regime. A loophole known as the “double Irish,” favored by some multinationals to cut their tax bills, was closed last year.