Dáil Éireann Debate, Wednesday - 29 June 2022
30. Deputy Michael Lowry asked the Minister for Finance if he will reconsider Ireland’s position on the global minimum tax rate in view of the fiscal challenges impacting and expected to impact Ireland and the need to make the country as attractive as possible for multinational investment; and if he will make a statement on the matter. [34814/22]
Amharc ar fhreagraIreland is very supportive of the two-pillar solution for the taxation of the digital economy reached globally at the OECD, an agreement to which we signed up along with over 130 other countries in October 2021. I believe that this agreement represents a fair compromise reflecting the competing interests of the many countries involved in the negotiations, large and small, developed and developing.
The decision to join the global agreement was not taken lightly but 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.
It is widely accepted that the international tax system needs to adapt to keep pace with changes in how business is conducted in an increasingly globalised and digitalised world. The last decade has been one of unprecedented change for multinational companies, with many anti-BEPS measures being introduced to tackle perceived tax avoidance. While these measures have been necessary, they have undeniably increased complexity for businesses.
This is a global issue, which requires global action to solve in a coordinated way, in order to avoid the proliferation of unilateral tax measures and trade tensions. The OECD agreement will ultimately bring long-term stability and certainty to the international tax framework, based on a shared understanding of where value is created in digital business models. This stability is of critical importance for business investment. This agreement will come at a cost, a substantial cost even, to Ireland in terms of reduced tax receipts, but I believe that this is a price worth paying to bring certainty and stability to the global trading environment and move away from the risk of trade wars, the impact of which would be amplified at a time of economic challenge.
Ireland has been to the forefront in recent years in implementing international tax reforms, and stakeholder engagement has been an essential element of this process. I published Ireland’s Corporation Tax Roadmap in 2018 to provide a clear line of sight for businesses on future planned reforms and updated it in 2021 to mark the concrete actions we have taken to adapt to agreed new international standards. My Department facilitates extensive engagement with stakeholders in advance of most new legislative measures being introduced, and this collaborative, transparent process provides certainty both to businesses already established here and those considering investing.
It is therefore my view that a considered, collaborative implementation of the Pillar Two minimum tax agreement, in conjunction with our EU and OECD partners, continues to be in the best interests both of Ireland and of globalised businesses investing here.
