DUBLIN (Reuters) - Ireland, resigned to having much to lose from a global overhaul of how multinational companies are taxed, has embarked on a damage limitation exercise that it hopes will let it and other low-tax economies retain some of their decades-old advantages. After years of talks, the Organisation for Economic Cooperation and Development (OECD) is confident of finding a consensus this year among 140 countries on rewriting international tax rules for the first time in a generation. For Ireland, opposing the changes would risk a messier outcome of larger rivals going their own way. Instead, it is trying to keep a proposed global minimum corporate tax as low as possible and allow companies to cut their tax bills in other ways, such as offsets for research and development - aims it shares with Hungary, another low-tax state and European Union outlier. Ireland’s 12.5% corporate tax rate has helped it beat economies 10 times its size to investments from, among others, the likes of Apple, Facebook, Google and Pfizer, who all call it their home in the region. Global momentum is building towards including a minimum tax that the administration of U.S. President Joe Biden wants set as high as 21%. That would undermine an economic success story that directly accounts for around one in eight Irish jobs. “The rate is the front line (for Ireland),” said PWC Ireland Managing Partner Feargal O’Rourke, who has advised the Irish government and U.S. companies with operations there on corporate tax. “There’s also the question of a minimum rate on what? The method of calculation and how it interacts with, for example, research and development and intellectual property, that’s all still in play.” Addressing an online tax conference organised by his government that 1,500 global participants signed up to on Wednesday, Irish Finance Minister Paschal Donohoe said any deal had to allow small countries to use tax policy as a legitimate lever to compensate for material advantages enjoyed by larger states. He also said an agreement must “accommodate Ireland’s 12.5% rate” and facilitate innovation and investment, a nod to the niche Ireland has carved out as a tax-efficient location to hold intellectual property rights. ALLIANCE OF SMALL ECONOMIES? While its regime has been under fire for years - and was the subject of the EU’s largest anti-competition order, a 13 billion euro ($15.65 billion) fine that Dublin and Apple overturned in court - Ireland does not have the bloc’s lowest corporate tax rate. Hungary’s 9% rate has helped it become a magnet for foreign carmakers including Daimler’s Mercedes-Benz. BMW is planning a new assembly line there, while South Korea’s SK Innovation has pledged $1.2 billion to build a battery plant. Sharing Ireland’s reservations over a global minimum tax, it too insists exemptions should be carved out for profits generated from real business activity such as research and development. “During the fight against harmful tax evasion, it is important that this effort should not transform into a fight against competitive tax systems,” Benedek Nobilis, a head of department at the Hungarian Finance Ministry wrote in an article for financial news website portfolio.hu last week. Together with countries in the Baltics, Nordics as well as like-minded Singapore, where the corporate tax rate is 17%, Ireland and Hungary have found themselves in an “alliance of small open economies” at the OECD, said Gerard Brady, chief economist at Ibec, Ireland’s main business lobby group. Ibec represents Ireland on a business advisory panel to the OECD, where it has also been pushing for companies to be allowed reduce their effective tax rate below any global minimum. The technical basis for that will be what matters, Brady said. “If they can do an agreement that includes tax incentives for research, recognition of real substantial activities... then a rate that is slightly above 12.5% would still leave Ireland with a competitive offering,” he said.