Taoiseach can't guarantee corporate tax rate of 12.5% 

Paschal Donohoe also said a tax on vacant homes will not “change the game” in solving the housing crisis on its own

On the first day of a week-long trip to New York, Micheál Martin refused to give a firm commitment on the 12.5% rate as talks continue with the OECD on a global corporate tax rate of 15%.

The Taoiseach has refused to guarantee foreign companies in Ireland that the corporation tax rate will stay at 12.5%.

On the first day of a week-long trip to New York, Micheál Martin refused to give a firm commitment on the 12.5% rate as talks continue with the OECD on a global corporate tax rate of 15%.

“We’re not in a position right now to make guarantees,” he said. “We’re in discussions and involved in the process. Companies are very understanding about what’s going on. They understand the OECD process. There’s still a journey to travel on this.”

Differences still exist

Earlier, speaking after a bilateral meeting with EU competition commissioner Paolo Gentiloni, Paschal Donohoe said differences still existed that precluded Ireland from fully backing the OECD global tax deal.

Ireland’s low corporation tax rate has long been viewed as an essential tool in attracting many of the world’s top companies here, but has been criticised for allowing multibillion-euro firms avoid paying a fair share.

When the initial OECD global tax agreement was signed in July, Paschal Donohoe said that Ireland could not sign up to it because the certainty and stability of the rate had not been established.

“We still have that view,” he told reporters.

Mr Donohoe stressed that the reference to “at least 15%” is a major obstacle in the OECD deal as it is currently constituted.

While he remains committed to exploring the possibility of signing up to the global tax deal, Mr Donohoe said there would be consequences either way.

The agreement has the backing of more than 130 countries.

Mr Donohoe said the involvement of the US in the deal was crucial amid talk of it struggling to be approved by Congress.

Speaking at Government Buildings, Mr Gentiloni said he was confident they could find a shared way that would see Ireland sign up.

“Yes, I am confident we can reach a global agreement,” he said. “Paschal has advocated strongly the Irish position and the commission fully respects that position and we are not ignoring that.”

Despite the lack of agreement, it was important to continue to talk, he added.

He denied his visit was intended to put pressure on the Government, but rather to respectfully discuss the importance of the potential agreement.

Mr Gentiloni said that, eight months ago, he would have been negative about a successful conclusion, but global rules are changing after the Covid crisis and the US administration change.

The global agreement was intended to bring stability and fairness to the system, he said.

Mr Gentiloni said he was convinced the attractiveness of the Irish economy was not based on a small difference in the corporate tax rate.

Vacant homes tax

Meanwhile, on domestic taxation, Mr Donohoe said a tax on vacant homes will not “change the game” in solving the housing crisis on its own.

A vacant homes tax is planned for next year to help alleviate the housing crisis and free up more properties as part of the Housing for All plan.

Speaking to reporters, Mr Donohoe said the tax will not be the single thing that helps "change the game".

“A vacant homes tax is not going to be of itself the single thing that will allow us to make progress on all of the challenges that we have with homes and housing at the moment, but it could be part of the answer,” he said.