I propose to take Questions Nos. 56, 68 and 74 together.
I have noted the communique from the G7 Finance Ministers which was published on 5th June 2021 and includes a reference to a minimum effective tax rate of 15% for multi-national enterprises. I attended the G7 meeting in London in the context of my role as President of the Eurogroup, and I do not speak on EU taxation matters in my role as President of the Eurogroup. The Eurogroup is an informal body where the ministers of the euro area member states discuss matters relating to their shared responsibilities related to the euro.
As Minister for Finance for Ireland, I represent Ireland’s views at EU meetings where taxation is discussed. These meetings take place in a format where all EU Member States participate, known as ECOFIN, where the rotating Presidency of the Council of the European Union chairs the meetings. The Presidency is currently held by Portugal; from 1 July 2021 Slovenia will take over.
As part of Council discussions late last year, all member states agreed to await the results of an OECD discussion on a global solution are available, but also maintained the commitment that the EU should act alone, in case no agreement is reached in the OECD.
The G7 communique is an important signpost towards an agreement but it is also important to remember that there are 139 countries in the OECD's Inclusive Framework on BEPS who are the decision making body. An agreement will be a compromise reached through consensus, and will need to meet the needs of small and large countries, developed and developing.
I believe that it is in everyone’s interest to achieve an ambitious agreement at the OECD discussions on the international tax architecture to provide the necessary certainty and stability.
The minimum rate is a sensitive one for Ireland and other small countries for good reasons. I believe that any agreement must be able to accommodate healthy and fair tax competition. At the same time I strongly believe in the need for robust boundaries to guard against aggressive tax planning.
It is important to recognise that a threshold will apply to the minimum effective tax rate. The threshold proposed for Pillar 2 is €750m annual global turnover. Thus, the vast majority of businesses in Ireland will not be subject to these new rules. It is also relevant that subsidiaries of US multinationals are already subject to a similar regime in the US known as GILTI which is expected to coexist with Pillar 2.
There will be further talks in late June and early July on an inclusive international agreement, and there is a lot to play out. I have said for some time that change is coming and we will adapt to this change as we have done before. Ireland will remain an attractive place for inward investment with an attractive tax rate.