DUBLIN (Reuters) – U.S. President Donald Trump’s decision to effectively pull out of a 2021 global corporate minimum tax deal does not pose a “significant threat” to Ireland, the head of the Irish foreign direct investment agency was quoted as saying on Thursday.
Ireland is hugely reliant on the taxes and jobs from a cluster of U.S. tech and pharmaceutical multinationals and played a key role in the 2021 deal signed by nearly 140 countries in a bid to retain its attractiveness as a hub for foreign investment.
Trump on Monday declared that the deal “has no force or effect” in the U.S and ordered officials to prepare options for “protective measures” against countries that have – or are likely to – put in place tax rules that disproportionately affect American companies.
As so many U.S. firms book large profits and pay a lot of their corporate tax in Ireland, Trump’s move could have implications for Dublin as a clause in the deal would oblige it from next year to collect a “top-up” tax from any of those U.S. companies that declare a tax rate below the 15% global minimum.
However the head of IDA Ireland, the state-run agency that works closely with some of the world’s largest multinationals, said the U.S. move would instead “require a revision” of the tax deal negotiated at the Organization for Economic Cooperation and Development (OECD).
“Trump’s order is undoubtedly going to lead to further negotiations on international tax and over the course of the next year we’re going to see that intensify,” IDA Ireland Chief Executive Michael Lohan told the Irish Times in an interview at the World Economic Forum in Davos.
“I do think we’re going to see agreement on this because ultimately companies need to trade internationally… and a fundamental component of that is tax certainty.”
Lohan said he therefore did not believe the U.S. withdrawal poses a “significant threat to Ireland”, the newspaper added.
