Big Irish companies in firing line in plans to enforce global tax deal

Smart Money: If a deal is done, Ireland would face stiff penalties if it did not join in

US treasury secretary Janet Yellen and Minister for Finance Paschal Donohoe had one-to-one meetings in the context of the proposed tax deal last month.  Photograph: Stephanie Lecocq/EPA

US treasury secretary Janet Yellen and Minister for Finance Paschal Donohoe had one-to-one meetings in the context of the proposed tax deal last month. Photograph: Stephanie Lecocq/EPA

A global tax deal still hangs in the balance. But if one is done, there are clear signals of pressure on countries who are holding out against an agreement. For Ireland, US plans to push countries to sign up are particularly vital, given the key role of US investment in Ireland. Large Irish companies with operations in the US are now exposed in the row over the deal, with the US threatening to target them for extra tax bills if Ireland does not sign up.

1. The state of play

The intention is to have a deal to reform the global corporate tax regime in place for G20 ministers to sign off on at a meeting in October, with a view to the new arrangements coming into place in 2023. It is an ambitious timetable, given the complexity. While 132 of the 139 countries involved in the talks under the auspices of the OECD (Organisation for Economic Co-operation and Development) have now signed up to outline proposals, there is much detail still to be agreed – and a few countries, like Ireland, have held out against parts of the deal. To make matters more complex, the Biden administration has to get the deal through the US Congress.

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