Last week, the Minister for Finance, Michael McGrath T.D., launched a second Feedback Statement on the transposition of the EU Minimum Tax Directive (the Pillar Two Directive). With work progressing on the domestic transposition of the Pillar Two Directive, legislation is to be included in Finance Bill 2023. The feedback statement is open for consultation until 21 August 2023. The Institute, under the auspices of the CCAB-I, will respond to the consultation. Members can email any comments to tax@charteredaccountants.ie.
As the OECD negotiations continue, the design process is constantly evolving. Earlier this month, the OECD released further Administrative Guidance on the GloBE rules covering a number of topics, including on items such as a Qualified Domestic Minimum Top-up Tax (QDMTT) Safe Harbour, a transitional undertaxed payments rule (UTPR) Safe Harbour for the jurisdiction where a multinational group is headquartered, general currency conversion rules, guidance on tax credits, substance based income exclusion and further guidance on a QDMTT. It is intended that the agreed guidance will help to provide tax certainty for businesses and mitigate administrative burden for both businesses and tax authorities.
The OECD also issued a revised version of the GloBE Information Return (GIR). The GIR is a standardised return to be filed by entities within scope of the Pillar Two rules. Guidance is provided on the format and required content of the GIR, together with the circumstances when categories of information in the return will be disseminated between jurisdictions.
As previously reported in March, the first feedback statement set out proposed approaches to key elements of the implementing legislation and the administration of the new rules. The second Feedback Statement contains draft approaches to further elements of the implementation legislation, including the proposed approach to a QDMTT, together with consultation questions on a range of technical and policy issues and an update on the Administrative Guidance package, in particular, the safe harbour provisions.
Minister McGrath commented,
‘I am pleased to publish the second Feedback Statement on the Irish implementation of the EU Minimum Tax Directive. This is a further important step in our domestic process of transposition and marks Ireland’s continuing commitment to delivering on agreed international tax reforms. I welcome the constructive input of the business and advisory communities with the development of these complex new rules and would encourage their early engagement with this new Feedback Statement.’
Read the full press release here.
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