Assurances needed that new corporate tax rate would not change, says Varadkar

Any global minimum corporate tax rate must not change and be implemented by all countries signing up to it, if Ireland is to sign up to it, Tánaiste Leo Varadkar has said.

Speaking in Washington DC as he addressed the Centre for Strategic and International Studies (CSIS), Mr Varadkar said it will be a sovereign decision of Ireland to decide what happens.

Meanwhile, the Tánaiste said any global minimum corporate tax rate must not change and be implemented by all countries signing up to it, if Ireland is to sign up to it.

Speaking in Washington DC as he addressed the Centre for Strategic and International Studies (CSIS), Mr Varadkar said it will be a sovereign decision of Ireland to decide what happens.

“Ultimately we decide what our income tax rate is, what our corporate tax rate is, what our capital gains tax rate is and we’d be very loath to depart from that principle . ..

“That’s why we retain the option of not participating in any international agreement or European directive on it,” he said.

His comments come amid of uncertainty over the future of Ireland’s 12.5% corporation tax rate.

In July, the Irish Examiner first reported of the government’s willingness to abandon the 12.5% rate should certain conditions be met.

Ireland is coming under pressure to sign up to an Organisation for Economic Co-operation and Development (OECD) deal that would see the introduction of a minimum global rate of “at least” 15 per cent.

Finance Minister Paschal Donohoe has made clear that the phrase “at least” lies at the heart of Irish objections.

“We would rather be in the tent as you said both politically and economically,” Mr Varadkar said.

“It would make more sense for us to be inside any global framework as it’s our instinct and that’s where we want to be,” he said.

However, he said: “One thing that has worked very well for us in our system is to have this low corporation tax rate – but it’s not just the rate, it’s the reliability.

“So through boom and bust, through recession and through periods of growth, through changes in Government that rate has remained the same and low.”