Over the weekend, finance members from the G7 nations backed a move which will could see the introduction of a global minimum corporate tax rate of 15%. The US-backed plan targets tech giants and other multinationals accused of not paying enough tax. However, Minister for Finance Paschal Donohoe, has said that the deal could see Ireland lose over €2b a year in corporation tax revenue. Prof Stephen Kinsella, Associate Professor of Economics at the University of Limerick and chief economics writer with The Currency, gave his analysis on the move to RTÉ Radio One's This Week. (This piece includes excerpts from the conversation which have been lightly edited for length and clarity - full discussion below).

"What it means is that a US multinational located in Ireland which pays an effective rate of 10% will be forced to pay another 5% back to the United States. It equalises the rates between different counties. Similarly, an Irish multinational based in France which pays an effective tax rate of 5% will pay another 10% on remittances sent back to Ireland. It’s country by country reporting.

"Some of the profits which are booked in Ireland are based on sales which take place in other countries. What that means in effect is that sales which are in, say, Germany should be booked in Germany. Indeed, the research and development levies and IP revenues which should be in the US will return to the US."

So is Ireland going to lose out on €2 billion as a result of this move? "We often hear that the devil is in the detail, but here the devil is in the dynamic", explains Kinsella. "The way things have been moving for several years has been towards a kind of tax harmonisation so it’s taking advantage of that dynamic as much as possible that will determine if we’re successful or if we’ll lose out.

"It’s important for people to remember that in 2013 that there were fairly big changes to various regimes and Ireland benefited from them when everyone expected us to lose out. There may be a chance that actually that multinational activity locates more solidly here just because of the way the deal ends up landing. When we come to study the actual detail of the workings out, that’s when we’ll know the hit, if any, is going to be."

For KInsella, there are three factors yet to be decided. "I don’t think we understand three things at the moment. One, we don’t understand the timing of this. We don’t know if we’re going to lose the €2b right away, will it be a bit more, will it be a bit less?

"The second thing, we don’t know the sectoral nature of it. A lot of our foreign direct investment is located in certain sectors and we don’t know which ones will be most affected. The third thing we don’t know is how this will affect the future flow of FDI. Will this affect it in a really big way or small way? Those are the three things I’ll be looking for as the various details of the negotiations come out."

You can hear the discussion in full, including RTÉ London editor Sean Whelan's report on the G7 meeting, below

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