Dáil Éireann Debate, Wednesday - 28 September 2022
121. Deputy Charles Flanagan asked the Minister for Finance if he will report on his Department's recent public consultation on the implementation of the pillar 2 minimum tax rate; the next steps he expects to take; and if he will make a statement on the matter. [47403/22]
View answer122. Deputy John Paul Phelan asked the Minister for Finance if he will report on his Department's recent public consultation on the implementation of the pillar 2 minimum tax rate; the next steps he expects to take in relation to same; and if he will make a statement on the matter. [47483/22]
View answerI propose to take Questions Nos. 121 and 122 together.
Ireland signed up to the two Pillar solution to address the tax challenges brought about by the digitalisation of the economy, agreed by the OECD/G20 Inclusive Framework on BEPS, in October 2021 (the ‘OECD agreement’). The decision to join the global agreement was not taken lightly, and I firmly believe this agreement brings a unique opportunity to reframe the international taxation architecture which has largely remained in place for almost a century.
My long-standing position is that the international tax system needs to adapt to keep pace with changes in how business is conducted internationally. This is a global issue which requires global action to solve. The OECD agreement is designed to bring long-term stability and certainty to the international tax framework.
My Department received 12 responses to the public consultation in relation to the Pillar Two minimum tax rate, and it is intended that the responses will be published shortly. The consensus from the responses received was positive. A general desire was expressed that Pillar Two would be introduced in as certain and straightforward a way as possible and that any opportunity is taken to simplify the tax rules in its implementation. It was also generally recognised that the implementation of Pillar Two in Ireland will be a major practical challenge.
The Inclusive Framework agreed and published Pillar Two Model Rules on 20 December 2021. An accompanying Commentary was published on 14 March 2022. The Commentary, which provides detailed technical guidance on the application of the Model Rules, is intended to promote a consistent and common interpretation of the rules across jurisdictions and taxpayers.
Pillar Two technical work remains ongoing at the OECD. Such work includes the drafting of further technical guidance, the design of a standardised information return to be filed by in-scope groups annually, and the development of a peer review process which will verify that jurisdictions have correctly implemented the rules.
An EU Minimum Tax Directive has been proposed to provide for co-ordinated implementation of the Pillar Two across all Member States, and I expect that unanimous agreement will be reached on the Directive later this year.
The proposed Directive provides for an implementation deadline of 31 December 2023 and work will be ongoing in my Department over the next year towards that deadline. It is expected that this will include further stakeholder engagement, through public consultations and/or Feedback Statements, all of which will be signalled publicly on my Department’s website.
