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An agreement on international tax reform could be reached as soon as this year, Ireland's finance minister said.
“I do believe there is potential for agreement on these matters,” Paschal Donohoe said in an interview with Bloomberg TV. “I do believe we are going to see change across 2021 and 2022 in relation to how very large companies are taxed.”
Ireland has staunchly defended how it taxes some of the world's biggest companies, even in the face of criticism from larger European partners. Tax competition is a legitimate tool for small countries, which may not have the same advantages as big ones, Donohoe argued last month.
“The likely way that change will be reached will be inside the OECD,” Donohoe, who also leads the euro-area finance ministers group that meets Friday, told Bloomberg. “I do believe toward this year agreement will be reached, and Ireland will be ready for that change.”
Donohoe's comments come after the European Union presented plans for a new corporate taxation framework for the bloc that would go further than a global deal under negotiation in changing rules on how much and where multinational firms should pay levies. The EU's supplementary measure -- dubbed Business in Europe: Framework for Income Taxation -- would create a single corporate tax rulebook and reallocate profits between member states.
Donohoe also suggested the EU recovery fund will start making money available to member states this year.
“You will see some money being made available in 2021, but a lot more being made available in 2022,” he said.
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