Dublin (AFP)

Irish and Estonian governments on Thursday agreed to raise their corporate tax rates to join the global tax reform deal negotiated under the auspices of the OECD, removing one of the remaining hurdles to success of the project.

After "detailed discussions, the government approved my recommendation that Ireland join the international consensus" on taxation, Finance Minister Paschal Donohoe said at a press conference.

"This is a very important step" in global reform, he said, adding that to reach a compromise, the agreement now spoke of a corporate tax at the minimum effective rate of 15%, and nor "at least 15%", a formulation which Dublin was opposed to because it left the door open to future increases.

In the process, the Estonian Prime Minister announced that Tallinn in turn joined the agreement.

This will "not change anything for most Estonian economic operators and will only concern the subsidiaries of large multinationals," Prime Minister Kaja Kallas stressed.

All eyes are now on Hungary, which remains among the countries that have yet to sign the agreement.

Hungarian Foreign Minister Peter Szijjarto wrote on Facebook on Wednesday after meeting with US Secretary of State Antony Blinken in Paris that "Hungary was ready to compromise if we could agree on a deal which does not harm the Hungarian economy (...). Based on the discussions in Paris, I have the impression that there is a chance that this will happen. "

Finance Minister Paschal Donohoe gives a press conference in Dublin, October 7, 2021 STRINGER POOL / AFP

The vast global tax reform negotiated under the auspices of the Organization for Economic Co-operation and Development (OECD), which regained momentum with the coming to power of US President Joe Biden, thus reaches a milestone. key.

After months of blocking, Dublin, which has a corporate tax rate of 12.5%, one of the lowest in the world, had multiplied Wednesday the statements suggesting a compromise.

The historic agreement announced in July, then concerning 134 countries, would be binding on multinationals with at least 750 million euros in turnover, including many large technology groups.

The Irish Finance Minister on Thursday welcomed an agreement which thus brings "certainty" and allows Dublin to remain "an attractive destination" for businesses.

Prime Minister of Estonia Kaja Kallas, leaving a summit between the EU and the Western Balkans, on October 6, 2021 at Brdo Castle (Slovenia) Ludovic MARIN AFP / Archives

"It is an important decision for our industrial policy, our future, it is complex. There will be consequences but there are many opportunities", assured Mr. Donohoe.

- "Patching up rich countries" -

At a time when States are looking for funds to restore their public finances damaged by the pandemic, this reform intends to fight against the tax avoidance of multinationals, mostly American, which register in countries with the lowest rates. of taxation.

By signing this compromise, Dublin is shaking up its low-tax economic model which has enabled it to attract many multinationals, in particular technological or pharmaceutical giants, which have registered their European headquarters there.

According to a poll commissioned by The Irish Times, a large part of the Irish were in favor of keeping the rate at 12.5%, which has enabled the country to experience rapid economic growth over the past twenty years.

The deal drew criticism from the NGO Oxfam, which lamented Thursday that "what could have been a historic deal to end the era of tax havens is becoming a tinkering of rich countries instead."

"The proposal for a global (minimum) tax rate set at 15% will largely serve rich countries and increase inequalities. The G7 and the European Union will recover two-thirds of new tax revenue but the most poor only 3% even though they represent more than a third of the world's population, ”lamented Susana Ruiz, head of fiscal policy at Oxfam.

The "inclusive framework" of the OECD, an expanded format that brings together around 140 countries, is meeting on Friday to try to endorse the final parameters of the reform, before a ministerial meeting of the G20 countries next week.

The objective is for the reform to be implemented by 2023.

© 2021 AFP