Pillar 2 consultation response highlights the need to consider interaction with Northern Ireland Corporation legislation

In its response to HM Treasury and HMRC’s consultation on the implementation of Pillar 2 in the UK which is designed to ensure multinational enterprises operating within the UK pay a global minimum level of tax (15 percent), the Institute highlighted that there is a need to consider the interaction of this legislation with the Corporation Tax (Northern Ireland) Act 2015.

In particular, should the Northern Ireland Executive implement a lower rate of corporation tax in NI for companies meeting the necessary conditions within the Corporation Tax (Northern Ireland) Act 2015, it is assumed that the minimum effective 15 percent rate of tax would only apply in Northern Ireland to multi-national enterprises with consolidated annual revenues greater than €750 million.

This would be relevant to large companies, as defined under the Corporation Tax (Northern Ireland) Act 2015, who would potentially qualify for the Northern Ireland Corporation Tax rate (subject to some other conditions being met) where consolidated annual revenues are less than €750 million.