Ireland’s response to global tax reform

The Department of Finance launched a public consultation on the OECD’s international tax proposals. Chartered Accountants Ireland under the auspices of the CCAB-I will respond to the consultation. We will reflect the unique professional experience of accountants on the issues raised in this important consultation.  With that in mind we invite members to respond to this survey before 16 August.  The Department of Finance notes that the consultation will be helpful in identifying the challenges and opportunities of the proposals in respect of Ireland’s corporate tax code and broader industrial policy.   On launching the consultation, Minister Donohoe said: ‘I believe it is in the interest of all concerned to achieve an equitable, ambitious and sustainable agreement at the OECD on the international tax architecture. It is essential as we emerge from the Covid-19 pandemic that the international tax system provides the necessary certainty and stability to support growth and investment, and Ireland is committed to playing our part in reaching the comprehensive agreement’. “I am committed to ensuring that Ireland’s tax policy continues to support economic growth and prosperity, and in this respect I would welcome the views of the public and key stakeholders on the key aspects of the OECD proposals” The consultation period runs from 20 July to 10 September.  For more details see the Department of Finance’s website. 

The OECD Inclusive Framework reached agreement on Pillar One and Pillar Two proposals last Thursday, but Ireland is one of nine members to not sign the agreement.  Ireland supports Pillar One proposals but will not sign up to a global minimum effective tax rate of ‘at least 15%’. Minister Donohoe said: ‘I have consistently spoken of my desire for a comprehensive, sustainable and equitable agreement on the international tax rules at the OECD that meet the needs of all countries, large and small, developed and developing. I was not in a position to join the consensus on the agreement and specifically a global minimum effective tax rate of ‘at least 15%’ today. I have expressed Ireland’s reservation, but remain committed to the process and aim to find an outcome that Ireland can yet support. Ireland will continue to play our part in reaching a comprehensive and, indeed, historic agreement’. A press release from the Department of Finance noted that Ireland will constructively engage with OECD Inclusive Framework in discussions and technical work over the coming months as part of the process to reach a comprehensive agreement is in October. Minister Donohoe was interviewed on Newstalk Breakfast, where he noted that he wanted to continue in the negotiation process, but that the global minimum effective tax rate was “a matter of huge national sensitivity to Ireland”.  

Minister for Finance, Paschal Donohoe, spoke to Morning Ireland last Friday and noted that all is still to play for as other small open economies express tax sovereignty concerns on the political agreement reached by the G7 on a 15 percent global minimum corporation tax rate.  Minister Donohoe says he is confident Ireland will continue to be an attractive location for FDI and will continue to compete with its 12.5 percent cornerstone corporation tax rate.  The Minister also noted that Facebook’s recent announcement that staff can work remotely overseas does not have any impact on Ireland’s tax residency rules for individuals and corporates.  The Minister went on to say that he is considering information and data on a possible vacant site tax but noted that the information to inform that decision will not be ready in time for Budget 2022.  For the full interview listen here to Morning Ireland.