Ireland will push for a global agreement on corporate taxation which “accommodates” its current low rate and allows “healthy and fair tax competition”, the country’s finance minister Paschal Donohoe said on Wednesday.

The remarks by Donohoe, who chairs the eurogroup of eurozone finance ministers, indicate that Ireland expects to clash with the US over President Joe Biden’s ambition to introduce a global minimum corporate tax rate.

Biden’s proposals, which emerged earlier this month, pledged to “end the race to the bottom over multinational corporate taxation”. That left countries with low corporate tax rates, including Ireland, bracing for a struggle.

Ireland charges a corporate tax rate of 12.5 per cent, one of the lowest in Europe. The Biden administration wants companies to be subject to a global minimum rate of 21 per cent; the European Commission has said it would favour an as-yet unspecified minimum.

Addressing a virtual meeting of international officials and experts, Donohoe said it was “clear that there is a new momentum” in the long-running discussions convened by the OECD in an attempt to harmonise policies across jurisdictions and eliminate quirks that can be arbitraged by companies.

Ireland estimates about 20 per cent of its annual corporate tax take would be lost under the Biden proposals, Donohoe said, while stressing that the country has attractions to multinationals well beyond its tax rate.

“I believe that an agreement can be reached and I will work constructively towards such an agreement,” Donohoe said. “But I also believe that it is a legitimate objective that any agreement can facilitate healthy and fair tax competition, while meeting the needs of all, not just some of the participants.”

Speaking at the same event, Pascal Saint-Amans, head of tax administration at the OECD, stressed the need for “tax peace” that would end the “race to the bottom” for global tax rates.

He praised the US proposals which he said had injected “momentum” into the global discussions.

Saint-Amans, who is leading the OECD negotiations, expressed confidence that the 139 countries involved would reach agreement by the next G20 finance ministers’ meeting in July. The negotiations were “too big to fail”, he added.

Despite the Biden proposals, the EU Commission plans to press ahead with a digital levy to help fund the continent’s economic recovery from the pandemic, according to Benjamin Angel, director for direct taxation at the European Commission.

Plans for such a levy had “nothing to do with this OECD discussion”, Angel suggested at the virtual meeting.

“It’s normal that each country, or group of countries as the European Union is, decides on its own tax mix and I see no reason why the digital economy should escape being part . . . of this tax mix,” he added.