By John Campbell

BBC News NI Economics & Business Editor

Image source, PA Media

Image caption, Taoiseach (Irish PM) Micheál Martin says OECD’s proposals show ‘very significant progress’

Ireland’s Taoiseach (prime minister) has indicated that the country is moving towards a deal on corporation tax reform.

The OECD, an intergovernmental economic organisation, has led work to agree a global minimum rate for large firms.

Micheál Martin said recent changes to the OECD’s proposals showed “very significant progress”.

The Irish government is due to discuss the issue on Thursday ahead of an OECD meeting.

Ireland has a corporation tax rate of 12.5%, which is one of the lowest in the developed world.

The country has used that low tax rate as a central part of its efforts to attract foreign investment, particularly from the US.

A global minimum rate would weaken the incentives for multinational companies to shift their profits to places where the tax rate is lower.

The OECD discussions are focused on a global minimum rate of 15%.

That would mean if a company paid tax at the lower Irish rate, then the US (or other countries) could top up that company’s tax in their jurisdiction to get it to the global minimum.

In practice it is more likely to mean that Ireland would increase its rate to the global minimum.

‘Very significant progress’

The OECD text is now understood to refer to a 15% rate, while an earlier version referred to a rate of “at least” 15%.

Mr Martin told broadcaster RTÉ that the change “represents very significant progress in terms of the evolution of this deal within the OECD”.

“Our challenge is to maintain certainty around tax for investors and for companies that are located here – continuity,” he said.

“And I think this text goes a long way towards meeting those objectives that we set ourselves, whilst also remaining competitive in terms of what we have to offer.”

In recent days, other Irish ministers have been indicating that a deal is likely when the OECD meets on Friday.

Environment Minister Eamon Ryan said he was “hopeful and confident” that Ireland will be able to be part of the solution.

Foreign Minister Simon Coveney said: “Ireland does not want to be isolated in this space, but we want to ensure that our view is properly heard.”