A 15pc global corporate tax rate will not harm Ireland’s ability to compete for inward investment, the EU’s economy chief has said.

Paolo Gentiloni said he “respects” the minister for finance’s commitment to Ireland’s 12.5pc rate and hopes for an “agreement in principle” in global talks next month.

“I respect his position, of course,” Mr Gentiloni told the Institute of International and European Affairs yesterday.

“I don’t think that if we decide a minimal taxation with a slightly different rate [than 12.5pc] this cancels any form of competition because it changes something, but without destroying at all the principle.”

He said Ireland “has all of the tools to sustain and even further cement its reputation and competitiveness” and that a 15pc minimum rate “is not destroying the national ownership but is addressing the needs of our single market”.

Finance Minister Paschal Donohoe last week said he would “vigorously” defend Ireland’s corporate tax rate and what he called “legitimate tax competition” between countries.

Mr Gentiloni said a global deal would encourage EU countries to get on board with a minimum tax by helping “to frame the legitimate European differences in a different way”.

Finance officials from all 139 countries participating in talks on global taxation – led by the Paris-based Organisation for Economic Cooperation and Development (OECD) – will meet at the end of the month to discuss progress.

Finance ministers from the world’s 20 leading economies (G20) are expected to endorse the deal in July, following a preliminary agreement on a US-backed 15pc global tax at a meeting of G7 finance ministers earlier this month.

“I don’t expect, honestly, to have a full definition of what we mean,” Mr Gentiloni said of the July G20 meeting. “I would be happy to have an agreement in principle and a number for the tax rate, and I think that the last US proposal is quite a realistic one – 15pc.”

Mr Gentiloni said the talks “have taken on a very encouraging new dynamic” thanks to the US reversing course and backing a global deal.

“I know that some countries, including Ireland, remain wary of the changes under discussion. But it is also my feeling that smaller, open economies have a lot to gain from these changes,” he said.