Dáil Éireann Debate, Tuesday - 26 July 2022
332. 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 investment strategies of multinational companies and the way that this may adversely impact Ireland’s attractiveness in a competitive global marketplace. [39874/22]
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, I look forward to this happening later this year. Ireland fully supports the proposal as it is balanced and provides the certainty which businesses need by avoiding divergent, unilateral measures in different countries.
The revised implementation timeline for the Directive 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.
My Department opened a consultation in May on the proposed Pillar Two rules where stakeholders, including businesses, can give their view. The consultation period has just closed (on 22 July), and my officials are now beginning to examine the responses received.
Ireland is mindful of the need to maintain a stable environment to allow business prosper. The best way of achieving that is follow through on our commitment made in October 2021 and be part of the global minimum tax rate which aims to place a floor on tax competition between countries and reduce the incentive to shift profits to low or no tax jurisdictions. This is a global issue, which requires global action to solve in a co-ordinated way.
