A key function of the Institute’s Tax Department is responding to the various public consultations which arise throughout the year. We normally update you on the work we do as it arises. However, as we took a break from issuing Tax News in August, we are providing an update this week on the latest contributions.
Where the Irish Government seek feedback on a particular matter, we typically respond under the auspices of the CCAB-I where there is a tax focus. The CCAB-I’s Tax Committee South is the body responsible for overseeing the submissions that we prepare. This body provides the vital technical input, and their role is pivotal in the overall quality of our output. We have summarised the latest contributions to the public discourse below.
Feedback Statement on New Taxation Measures to apply to Outbound Payments
This consultation was a follow-up to the Department of Finance’s public consultation in November 2021. The Feedback Statement contained a range of proposals based on the feedback received then. The legislation proposed sets out measures to apply to outbound payments of interest, royalties, and dividends to prevent perceived double non-taxation.
In our submission, CCAB-I noted the significant tax reforms which have taken place in successive Finance Acts and the impending landmark legislation being introduced as part of the EU Minimum Taxation Directive. As a result, a range of measures to safeguard against double non-taxation outcomes have already been introduced and have already had a significant impact.
In that regard we urged caution in terms of increasing the compliance burdens faced by MNE groups and asked that the new legislation is targeted at double non-taxation outcomes and not unintended ones. CCAB-I also recommends that any new legislation is drafted in a simple and targeted manner, so genuine commercial transactions are not affected and Ireland’s competitiveness as a home for international investment remains in situ.
Pillar Two Implementation Second Feedback Statement
This consultation was a follow-up to the Department of Finance’s initial feedback statement in May of this year. Since the first feedback statement, we have been engaged extensively with the Department of Finance and Revenue via the TALC BEPS Sub-committee. The key area of focus for the Government ahead of Finance (No.2) Bill 2023 is in the design of the Qualified Domestic Minimum Top-up Tax. In addition, we noted the need for clarity as to the interaction of the accountancy frameworks under which the various entities in an international group operate.
Funds Sector 2030: A Framework for Open, Resilient & Developing Markets
This consultation by the Department of Finance is a wide-ranging and ambitious project. CCAB-I's contribution has focused on the tax-related issues, primarily contained in Sections 5, 6 and 7 of the consultation. We have highlighted the success of the Irish funds regime and how integral it is to the overall Irish financial services’ sector. We have made several key suggestions which we believe will improve the functioning of the funds’ sector and ensure Ireland remains an attractive location for fund managers across the world.
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