In Emmanuel Macron’s first visit to Ireland since entering office, he’ll meet Irish President Michael Higgins and Irish Taoiseach Micheál Martin to discuss Afghanistan, Brexit, and taxation. Higgins and Macron will have common ground to start talks on taxation, having stood up to Boris Johnson on Brexit and increase maritime traffic between France and Ireland.
Taxation is a sore point since Ireland is against the global tax deal brokered by the Organization for Economic Cooperation and Development.
Ireland is one of a few nations that have not accepted a global 15% minimum global corporate tax rate and the distribution of profits from the large corporations to the countries they benefit from. The country has numerous corporations headquartered in it, attracted by its low 12.5% corporate tax rate.
Ireland has a vested interest in keeping the status quo since the corporations employ close to a third of the country’s workforce with higher than average salaries. These jobs generate half of the country’s income tax collection. France has headline rates approaching 30% and argues Ireland has poached U.S. investment that could have gone to France.
The sovereignty of tax
France believes that the mood in Dublin may be changing. An Elysée official said that the Taoiseach and ministry of finance are giving France signals that they are ready to work on this and look at the details of the tax deal.
However, this could just be wishful thinking on France’s part. Dublin has reminded France and other nations backing the deal that even though movements and concessions are possible before the deal is confirmed, tax is a sovereign matter.
Ireland can’t stop other nations from accepting the deal but will continue to act in the best interests of its economy.