I propose to take Questions Nos. 211 and 212 together.
The Deputy will be aware that the 140 member jurisdictions of the OECD Inclusive Framework are meeting later this week to reach an agreement on the broad parameters of a two pillar solution to address the address the tax challenges of digitalisation. The first aspect of these proposals, Pillar One, provides for a re-allocation of a proportion of the profits of highly profitable very large multinational groups to taxation in the market jurisdiction. Pillar Two proposes a global minimum effective tax rate to multinational groups which have an annual turnover in excess of €750 million.
It is likely that, if agreed and implemented, these proposals will result in a reduction of corporation tax receipts in Ireland. Department of Finance officials previously estimated that the cost to the Exchequer of the OECD reforms may be up to EUR €2 billion annually. This is the estimate included in both the Stability Programme Update published by the Department in April and the Summer Economic Statement published in July, with the full amount to apply from 2025. Notwithstanding progress on headline aspects of the proposals, there remain a number of important technical details outstanding on both Pillars, making it very difficult to provide an update to this estimate at this juncture.
The way in which business operates internationally has changed significantly in recent years due to the digitalisation and globalisation of the economy and I believe that the international tax system must evolve to reflect these changes. Bringing stability and certainty to the international tax system will have longer-term benefits for Ireland and the global economy generally.
Negotiations are ongoing and there are important aspects of the proposals that remain to be resolved. Nevertheless, I expect that the OECD Inclusive Framework will find agreement on a comprehensive, sustainable and equitable solution which meets the needs of all countries, large and small, developed and developing.