Dáil Éireann Debate, Wednesday - 27 January 2021
213. Deputy Carol Nolan asked the Minister for Finance if his Department has introduced new anti-hybrid mismatch rules in line with commitments under the Anti-Tax Avoidance Directive; the impact these rules have brought about; and if he will make a statement on the matter. [4041/21]
View answerAs part of Finance Act 2019, I introduced Anti-Hybrid rules in accordance with our obligations under the EU Anti-Tax Avoidance Directives or “ATAD”. The ATAD Anti-Hybrid rules have applied to all corporate taxpayers with effect from 1 January 2020. They are intended to prevent arrangements that exploit differences in the tax treatment of an instrument or entity under the tax laws of two or more jurisdictions to generate a tax advantage.
As the Anti-Hybrid rules took effect from 1 January 2020, it is only when corporation tax returns for 2020 are filed and analysed that the effect of these rules on Irish corporation tax receipts will be known. However, the expectation is they may not significantly affect Irish companies because our worldwide system of taxation and various existing Anti-Hybrid and anti-avoidance rules already existing in legislation have meant that hybrid structures have not been a feature of tax planning here.
It is also to be noted that Anti-Hybrid rules are not designed primarily to raise Exchequer revenue, but rather to modify taxpayer behaviour by preventing the use of hybrid mismatches to create tax advantages. The purpose of the rules is to improve the robustness of the international corporate tax system as a whole, and the coordinated introduction of Anti-Hybrid rules across all EU Member States aims to ensure their effective operation. Implementing Anti-Hybrid rules is part of a global solution to a global problem.
