Historic Change to Ireland’s Corporate Tax Regime

20th November 2023

Posted In: FYI

The implementation of the 15% global minimum tax rate for large companies under the OECD Pillar Two agreement and the EU Minimum Tax Directive is a once-in-a-generation reform to the Irish corporation tax system and the culmination of a ten-year, global project to reform the taxation of multi-national enterprises.

This was one of the key takeaways that attendees from across industry took from an event this afternoon with Minister for Finance Michael McGrath TD and hosted by European Movement Ireland and the Maples Group.

Minister McGrath reiterated that Ireland is fully committed to agreed international tax reforms, citing the importance of the Department of Finance public consultation process on the transposition of the Directive into Irish law.

Addressing the gathering, Michael McGrath TD, Minister of Finance, remarked: “In October 2021, the Government decided to sign up to the OECD two pillar agreement to address tax challenges arising from the digitalisation of the global economy.  As a small open economy, it is critically important for us to support the implementation of this agreement at a global level.

The introduction of Pillar Two rules in the Finance Bill this year will mark a significant change to the tax landscape in Ireland and we thank the business community for engaging and supporting that process”

Andrew Quinn, Head of Tax at the Maples Group Ireland, noted: “The implementation of the EU Minimum Tax Directive in Ireland is a hugely significant moment for Ireland.

It means Ireland is now part of an agreed and uniform global approach for the taxation of large companies.

The OECD Global Minimum Tax initiative got the critical mass it needed when the EU Member States agreed unanimously to implement it through the Directive.”

Noelle O’Connell, CEO, European Movement Ireland stated: “We thank Minister McGrath and Andrew Quinn, Maples for a clear-cut discussion on this landmark EU directive Their insights prove invaluable as Ireland implements historic international tax reforms. As Ireland joins the EU in implementing a minimum global corporate tax rate, we must continue the conversation at home. Open dialogue will ensure Ireland upholds its interests while advancing European tax fairness.

Cooperative reform strengthens the single market, prevents distortionary tax practices between member states, and fosters healthy competition. Ireland’s participation proves its commitment to equitable solutions”.

The effect of the EU Directive is that large EU groups, whether headquartered in Ireland or elsewhere in the EU, will now be subject to an effective tax rate of at least 15% on all their profits wherever arising. This follows the unanimous adoption of the EU Directive by member states to ensure a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the EU.

The online event can be watched back here>>