Dáil Éireann Debate, Tuesday - 12 July 2022
334. Deputy Michael Lowry asked the Minister for Finance if he has considered the impact of the uncertainty of the delays in the adoption of the corporation taxation rate at European Union level on the capacity of companies to meet the administrative burden of compliance; and if he will make a statement on the matter. [38059/22]
View answerIreland signed up to OECD global agreement in October 2021, with Pillar Two consisting of a minimum effective tax rate of 15% for large corporates. The European Commission published its proposal for the EU Minimum Tax Rate Directive on 22 December 2021.
Ireland has been fully engaged on the technical work regarding the proposed Directive throughout the first half of 2022. Though agreement has not yet been reached by all Member States, Ireland looks forward to this happening later this year. Ireland fully supports the proposal as it is balanced and provides the certainty and stability which businesses need by avoiding divergent, unilateral measures in different countries.
It is essential, both for businesses and Revenue authorities, that the administrative processes for implementation of the agreed global minimum tax are clear and operable in practice, and further Pillar Two technical work is continuing at the OECD on matters such as information filing obligations.
Furthermore, the revised implementation timelines also now allow for a more considered implementation, in consultation with stakeholders. The European Commission initially proposed that the Pillar Two rules would be effective from 1 January 2023, however, the current draft Directive now provides that the rules will be applied within the European Union for periods of account beginning on or after 31 December 2023. With filing not due until 18 months after the initial period of account, for most companies this would mean that the first Pillar Two returns would not be due until mid-2026.
Ireland is mindful of the need to maintain an environment of certainty for businesses. We intend to follow through on our commitment made in October 2021 to the OECD agreement as the best means of achieving that certainty.
