David Chance: 'Ireland fights its corner as biggest global tax changes in decades loom'
The outcome of proposed changes to the global tax system may be uncertain and, in the words of a Canadian finance official, even the economic impact is uncertain, but one thing is for sure, it will generate lots of jobs for decades to come – at least for advisers and accountants.
Hundreds of professionals from the tax, accountancy and academic worlds gathered in Dublin Castle yesterday and heard a ringside account of talks held this week by the world’s finance ministers as they debated whether and how to tax the digital economy in what could be the biggest changes to the global tax system in decades.
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Despite intense day-long discussions in Paris about tax changes under the less-than-snappily named ‘Base erosion and profit shifting’ (Beps) rules and a delayed flight that saw the team arrive back in Dublin at one in the morning, Finance Minister Paschal Donohoe told the attendees that rapid change was coming.
The Minister drew a line in the sand at surrendering tax sovereignty and said global minimum tax proposals that appear to be driven by large economies were out of the question.
Exporters like Ireland will suffer under any such move. He and others cited a litany of rapid changes to tax that have limited the ability of companies to set up paper companies in one jurisdiction and sought to end tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits.
For some at the conference, the pace of change in which national tax reforms have been undertaken at the same time as seeking international agreements indicates that it is time for a pause. “Beps has been effective in changing corporate behaviours,” KPMG head of tax Jane McCormick told the conference.
She said she feared “a rush to action” as a self-imposed deadline for the OECD looms at the end of 2020.
Brian Ernewein of Canada’s tax policy unit said that while the changes so far had a “positive impact without qualification”, it was difficult to quantify their real economic impact.
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