No guarantee Ireland will keep 125 corporate tax rate - Taoiseach

Taoiseach Micheál Martin has said he will not be making commitments to US companies “one way or the other” that Ireland will be keeping its 12.5 per cent corporate tax rate.

It comes as Ireland comes under pressure to sign up to an Organisation for Economic Co-operation and Development (OECD) plan for a global corporation tax rate of at least 15 per cent. Ireland is one of only a handful of countries holding out against the plans.

Mr Martin is in the New York where he is attending United Nations meetings and will also support the work of IDA Ireland which is tasked with attracting inward investment into Ireland.

The 12.5 per cent rate has been a cornerstone of Ireland’s strategy to bring jobs to Ireland for decades.

Asked if he will be telling US companies that Ireland is committed to the 12.5 per cent rate, Mr Martin said he would not be making commitments “one way or the other” to individual companies.

He later stressed that talks on the OECD deal are ongoing.

Earlier, Minister for Finance Paschal Donohoe said Ireland may remain outside of the tax deal amid concerns about “deeply problematic” aspects of the plan to tax business profits around the world.

Despite this, European commissioner for economy Paolo Gentiloni, who was in Dublin on Monday for talks, said he is “quite confident” that a deal can be struck.

Speaking after their meeting, Mr Donohoe said he emphasised “that the ‘at least’ is deeply problematic for Ireland”.

Mr Donohoe said the State is “inside the process of the OECD, but we are not currently in the agreement. I emphasised the huge challenge and importance of this process to Ireland and how central the stability of corporate tax policy is to our economy.”

He warned that Ireland’s position may not change.

“I remain committed to seeing whether the process can yield an outcome that Ireland would be willing to consider joining. But equally, I have communicated to my colleagues that where we are at the moment of not being in the agreement is a position that could continue,” he said.

“I’m very clear that it is not appropriate for Ireland to be in the agreement. Now, that may continue to be the case. But equally, we are working very hard to see if an agreement is possible that would allow Ireland to join.”

The Government also wants clarity on whether the US Congress accepts the plan before deciding whether to move.

Mr Gentiloni said that it would be a “nonsense” to suggest that the US would not be centrally involved.

“Let me recognise that if we have a chance to reach this achievement, this is mostly due to the US administration initiative and pressure. But of course we need the European Union to have member states on board, as this is not â€" for the moment â€" the case. And of course the Americans will do their part but I can’t imagine a global agreement without the central role of the United States, this would be a complete nonsense . . . It is thanks to the United States that this global agreement . . . is now under discussion.”

He said there are 134 countries that signed the agreement in the preliminary stage, “so of course the US will be there”. The commissioner also expressed confidence that a deal could be reached despite Irish concerns.

“Yes, I am confident that we can reach an agreement, a global agreement. I think the answer to this question eight months ago would have been negative. What has changed in the last period of course is the new commitment of the US administration.”

Mr Donohoe reiterated that whatever recommendation he makes to Government in the coming weeks on the OECD deal would be guided by what is in the best interests of the country.

“With any decision that we make, there will be consequences. The decision to be outside an OECD framework will have consequences. The decision for Ireland to enter into an OECD agreement will also have consequences for national tax revenue. And we are using our energies and our engagement with the OECD and with the commission in a positive way to see whether it is possible to reach agreement. But we are still some bit away from that,” said Mr Donohoe.

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