Press release
Minister McGrath launches next phase of consultation on EU Minimum Tax Directive
Published on
Last updated on
Published on
Last updated on
The Minister for Finance Michael McGrath has today (Friday) launched a Feedback Statement on the transposition of the EU Minimum Tax Directive (the Pillar Two Directive).
In October 2021, Ireland, along with over 130 other countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Sharing (the Inclusive Framework), signed up to an historic agreement to reform the international tax framework as it applies to large corporate groups. Building on the original Base Erosion and Profit Shifting (BEPS) project, the agreement contains a Two Pillar solution to address the tax challenges arising from digitalisation and globalisation.
Pillar Two of the Agreement primarily consists of two interlocking rules, together referred to as the Global anti-Base Erosion (GloBE) rules. These rules, as reflected within the EU in the Pillar Two Directive, require Member States to introduce a global minimum effective tax rate of 15% for corporate groups with annual global turnover of at least €750 million. This minimum rate will apply in each jurisdiction in which the group operates, and will be calculated on an adjusted accounting measure of profit.
This Feedback Statement builds on the May 2022 public consultation, which considered broad scoping questions relevant to the implementation of the Pillar Two rules into Irish legislation. Most respondents noted the complexity of Pillar Two and requested that further detailed consultation would take place during the development of the relevant legislation, to assist companies in preparing to comply with the new requirements when implemented.
This Feedback Statement brings forward possible draft legislative approaches to key elements of the GloBE rules and outlines possible approaches that could be taken in respect of the Qualified Domestic Top-up Tax (QDTT) and administrative requirements such as registration, self-assessment, filing of returns, payments and record-keeping.
The views of stakeholders are important in ensuring that Ireland’s legislation to transpose the Directive will, when introduced, be clearly understood and operable in practice, while also meeting the international standards required.
Speaking today, Minister McGrath said:
“In October 2021, the government decided to sign up to the OECD two pillar agreement to address tax challenges arising from the digitalisation of the global economy.
"This year will be a pivotal year for the progression of the agreement, which will bring with it a unique opportunity to reframe the international taxation architecture that has largely remained in place for almost a century.
"As a small open economy, it is critically important for us to support the finalisation and implementation of this agreement at global level.
"I will be bringing forward legislation to deliver Ireland’s implementation of the EU Minimum Tax directive in the Finance Bill this autumn, fulfilling our commitment to implement Pillar Two of the OECD agreement. The publication of this Feedback Statement today allows further stakeholder input on this important matter.”
The consultation period will run to close of business on Monday 8 May and any queries or requests for clarification can be directed to businesstaxpolicy@finance.gov.ie in advance of the consultation deadline. In view of the complexity of this project and the limited time available to meet the transposition deadline, legislative drafting work will be continuing during the consultation period, and early engagement by stakeholders is therefore encouraged.
The preferred means of response is by email to businesstaxpolicy@finance.gov.ie
Receipt of email submissions will be acknowledged within 2 working days. If you do not receive an acknowledgement, please contact the department to confirm receipt of your submission.
If it is not possible to reply by email, or if you wish to make a submission both electronically and in hard copy, submissions may also be sent by post to:
Pillar Two Consultation, Tax Division – Business Tax Policy, Department of Finance, Government Buildings, Upper Merrion Street, Dublin 2, D02 R583.