Tax – the elephant in the room on President Macron’s visit to Dublin

27 August 2021

Yesterday, French President Emmanuel Macron was welcomed to Ireland on his first official visit to the State since taking office in 2017. The day commenced at Áras an Uachtaráin where the President was welcomed by President Michael D. Higgins and where he noted Ireland’s place “at the heart of the European dream.”

The President then travelled to Government Buildings for a working lunch with the Taoiseach Micheál Martin. At the press conference that followed, the Taoiseach said “France and Ireland are the oldest and best of friends. Ours is a friendship that has endured and evolved over the centuries” and attested that the links between the two States are deep and “have never been stronger”.

President Macron was also accompanied by Minister of Europe and Foreign Affairs, Mr Jean-Yves Le Drian, Minister of the Economy, Finance and Recovery, Mr Bruno Le Maire and finally, Secretary of State for European Affairs, Mr Clément Beaune. All the Ministers took the opportunity to meet with their counterparts, Ministers Coveney, Donohoe and Byrne respectively. 

President Macron and the Taoiseach welcomed the Ireland-France Joint Plan of Action, signed yesterday by both States’ Ministers for Foreign Affairs, Simon Coveney and Jean Yves Le Drian. It sets out an ambitious programme of cooperation across a wide spectrum of areas for the coming five years. 

The leaders also discussed the “extremely difficult and concerning situation in Afghanistan”, Covid-19, the “need to make best use of the historic NextGenerationEU recovery package to drive forward the digital and climate transformations”, the International Panel on Climate Change’s recent report and the EU’s relations with the UK post-Brexit.

On Brexit, the Taoiseach said “a positive and constructive future partnership is in everyone’s interest. But it will only be delivered if there is a relationship of trust, and a willingness to deliver on commitments entered into”.

Despite positive musings coming from the leaders on the day, the international press suggested the President Macron was heading to Ireland “hoping to persuade leaders to sign up to the global tax deal brokered by the OECD in July.” Politico remarked that taxation was “a sore point in the relationship.”

Ahead of the visit, Elysée officials reportedly told journalists that the French believe the Irish “have not completely closed the door” on joining the OECD’s deal, saying “it will be the focus of our talks and we are heading to Ireland to listen and understand the difficulties they face.”

Meanwhile, an Irish official told the same Politico journalist that Ireland will stand by its 12.5% corporate tax rate. “We cannot prevent other jurisdictions from charging additional corporate tax on profits beyond Ireland’s own sovereign rate of 12.5% […] Likewise, our European partners know well than tax is a sovereign matter and the policies being proposed at OECD level will not in any way prevent Ireland from continuing to manage its taxation policies as a sovereign matter.”

Considering the European Commission’s desire to enshrine a minimum tax rate into EU law early next year, Ireland’s support is crucial given matters of taxation require unanimity.