Press release
Ireland broadly supports OECD Inclusive Framework Agreement on key aspects of new international tax rules with reservation – Donohoe
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Last updated on
Published on
Last updated on
The OECD Inclusive Framework has today (Thursday) reached agreement but not unanimous consensus on the key aspects of the two-pillar solution to address tax challenges arising from the digitalisation of the economy.
Pillar One proposes a re-allocation of a proportion of tax to the market jurisdiction, while Pillar Two seeks to apply a global minimum effective tax rate. Work will now continue with a view to finalising a comprehensive agreement in October.
Ireland has fully supported the Pillar One proposals. This is in recognition that the way in which business is conducted has evolved and that the taxation system must evolve with it. There will be a cost to Ireland for this in terms of reduced corporation tax receipts, but overall Pillar One will bring stability and certainty to the international tax framework and will help underpin economic growth from which all can benefit.
Ireland expressed our broad support for the agreement on Pillar Two but noting our reservation about the proposal for a global minimum effective tax rate of ‘at least 15%’. As a result of this reservation, Ireland is not in a position to join the consensus.
There is much to finalise before a comprehensive agreement is reached in October. Ireland will constructively engage in these further discussions and technical work over the coming months.
Minister Donohoe has said:
‘I have consistently spoken of my desire for a comprehensive, sustainable and equitable agreement on the international tax rules at the OECD that meet the needs of all countries, large and small, developed and developing. I was not in a position to join the consensus on the agreement and specifically a global minimum effective tax rate of ‘at least 15%’ today. I have expressed Ireland’s reservation, but remain committed to the process and aim to find an outcome that Ireland can yet support. Ireland will continue to play our part in reaching a comprehensive and, indeed, historic agreement’.
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