Minister McGrath launches next phase of consultation on EU Minimum Tax Directive
- Foilsithe: 27 Iúil 2023
- An t-eolas is déanaí: 12 Aibreán 2025
The Minister for Finance Michael McGrath has today launched a second Feedback Statement on the transposition of the EU Minimum Tax Directive (the Pillar Two Directive).
Feedback Statement on the transposition of the EU Minimum Tax Directive (the Pillar Two Directive)
Work is continuing to progress on the domestic transposition of the Pillar Two Directive, with legislation to be included in the autumn Finance Bill 2023. In March, a first Feedback Statement was published, setting out proposed approaches to key elements of the implementing legislation and the administration of the new rules.
The design of the domestic legislation is an evolving process, as the OECD negotiations have been continuing on some aspects of the administration of Pillar Two. On 17 July, the OECD released further Administrative Guidance on the GloBE rules covering a number of topics, including on items such as a Qualified Domestic Top-up Tax (QDTT) Safe Harbour, a transitional 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 QDTT. The agreed guidance, particularly on the safe harbours, will help to provide tax certainty for businesses and mitigate administrative burden for both businesses and tax authorities.
In July, the OECD also released a revised version of the GloBE Information Return (GIR), a standardised return to be filed by entities in scope of the Pillar Two rules. The publication includes administrative guidance on the format and required content of the GIR, and the circumstances when categories of information in the return will be disseminated between jurisdictions.
Work on the GloBE Implementation Framework will continue at the OECD over the coming months, including on elements such as dispute prevention and resolution mechanisms, the peer review process and outstanding items of Administrative Guidance, with the aim of ensuring coordination and consistency in the application of the GloBE rules across jurisdictions.
The second Feedback Statement contains draft approaches to further elements of the implementing legislation, including the proposed approach to a QDTT, together with consultation questions on a range of technical and policy issues. It also provides an update on the OECD July 2023 Administrative Guidance package, in respect of which drafting is ongoing – 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."
Minister McGrath also welcomed recent progress on Pillar One of the OECD Agreement and noted the publication of the Outcome Statement on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy on 12 July:
"The publication Outcome Statement is an important milestone which recognises the significant progress that has been made on Pillar One and sets a pathway for the remaining issues to be resolved. The majority of the rules are now substantially agreed and, while there are some critical elements such as Amount B yet to be fully settled, we are now closer to a final package of reforms that will provide greater tax certainty and stability for businesses and governments alike."
As well as detailing the progress made, the Outcome Statement sets out the next steps for Pillar One, including the Multilateral Convention which will implement the Amount A rules, and the simplification of transfer pricing rules known as Amount B. It also sets out an action plan to support the swift and co-ordinated implementation of the Two-Pillar Solution.
Consultation deadlines and how to respond
The consultation period will run to close of business on Monday 21 August and any queries or requests for clarification can be directed to businesstaxpolicy@finance.gov.ie in advance of the consultation deadline. Any submissions received after the deadline may not be considered and early engagement is encouraged.
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. Respondents are therefore encouraged to respond early if possible.
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.