Updated Corporate Tax Roadmap

Jan 18, 2021

Minister for Finance, Paschal Donohoe TD, recently announced the publication of an update to Ireland’s Corporation Tax Roadmap. The update reflects Ireland’s plan on navigating through the challenges presented by international tax reform. The effect of international tax reform is expected to impact Irish corporation tax receipts, with estimated lost revenue of between €800m to €2 billion a year over time.

Ireland’s Corporate Tax Roadmap January 2021 Update outlines additional actions that will be taken as part of international tax reform efforts. This includes commitments to:

  • Implement Interest Limitation Rules in accordance with the ATAD standard;
  • Legislate for new international tax transparency rules for digital platforms;
  • Legislate for reverse hybrid aspects of ATAD anti-hybrid rules;
  • Adopt the authorised OECD approach to transfer pricing of branches;
  • Consider actions that may be needed on outbound payments from Ireland and our wider withholding tax regime;
  • Strengthen our domestic stakeholder engagement process.

The Roadmap considers the Pillar One and Pillar Two Blueprints, published by the OECD/G20 Inclusive Framework on BEPS and the European Commission Action Plan for Fair and Simple Taxation Supporting the Recovery Strategy. The Minister sets out that agreement at an international level continues to represent the most desirable pathway to sustainable tax reform, while also discussing the need to be proactive in ensuring that Ireland’s corporation tax regime remains competitive, fair and sustainable with the 12.5 percent rate at its core.

Minister Donohoe also discussed the updated Roadmap and the volatility of Irish corporation tax receipts on RTÉ Radio 1.

See the Department of Finance’s press release for more details on the updated Roadmap.