Consultations
The Department of Finance has launched a number of public consultations, including:
- A review of Ireland’s funds sector, inviting views on how Ireland can maintain its leading position in asset management and fund servicing, as well as ensuring the sector is future-proofed and continues to meet international best practice. The review incorporated three recommendations from the Commission on Taxation and Welfare, relating to the Irish Real Estate Fund and Real Estate Investment Trust regimes and the section 110 regime.
- A consultation on new measures to apply to outbound payments of interest, royalties and dividends, to prevent double non-taxation. This is the final remaining commitment under the National Recovery and Resilience Plan to tackle aggressive tax planning, when securing funds under the European Commission Recovery and Resilience Framework, and the government will legislate for these new defensive measures in Finance (No. 2) Bill 2023.
The OECD/G20 Inclusive Framework on BEPS has agreed an outcome statement on the Two‐Pillar solution
- A second feedback statement on the transposition of the EU Minimum Tax Directive (Pillar Two), outlining possible draft legislative approaches to key elements of the Global Anti-Base Erosion (GloBE) rules. The statement outlines possible draft legislative approaches for a transitional country-by-country reporting safe harbour; a transitional undertaxed profits rule safe harbour; a qualified domestic top-up tax; rules for the Pillar Two elections; and principles for construing the administration and rules in accordance with the OECD Global Anti-Base Erosion (GloBE) model.
Inclusive Framework
The 138 members of the OECD/G20 Inclusive Framework on BEPS have agreed an outcome statement on the Two‐Pillar solution to address the tax challenges arising from the digitalisation of the economy.
Members of the Inclusive Framework have agreed to refrain from imposing new digital service taxes
This summarises a package of deliverables developed by the member countries to address the remaining elements of the Two‐Pillar solution and comprises the following four parts:
Part I: multilateral convention (MLC) on amount A of Pillar One
This MLC allows jurisdictions to reallocate and exercise a domestic taxing right over a portion of the residual profits of a multinational enterprise. The text of the MLC will be opened for signature in the second half of 2023, with the objective of enabling the MLC to enter into force during 2025.
Members of the Inclusive Framework have agreed to refrain from imposing newly enacted digital service taxes or relevant similar measures on any company between 1 January 2024 and the earlier of 31 December 2024 or the entry into force of the MLC.
Consideration will be given to the needs of low-capacity jurisdictions
Part II: amount B of Pillar One
The Inclusive Framework has achieved consensus on a proposed framework for the simplified and streamlined application of the arm’s length principle to in-country baseline marketing and distribution activities (known as amount B).
The Inclusive Framework plans to approve a final report on amount B and incorporate key content into the OECD Transfer Pricing Guidelines by January 2024. Due consideration will be given to the needs of low-capacity jurisdictions and the interdependence with the MLC.
Part III: subject to tax rule (STTR) under Pillar Two
Inclusive Framework members that apply nominal corporate income tax rates below 9% to intra-group interest, royalties and a defined set of other payments will implement the STTR in their treaties with developing Inclusive Framework members when requested to do so. The Inclusive Framework has completed and delivered an STTR model provision, commentary and a multilateral instrument (MLI), together with an explanatory statement, to facilitate the implementation of the STTR.
The OECD will prepare a comprehensive action plan for swift and co-ordinated implementation
The MLI implementing the STTR will be released and open for signature from 2 October. Members of the Inclusive Framework can elect to implement the STTR by signing the MLI, or bilaterally amending their treaties to include the STTR when requested by developing Inclusive Framework members.
Part IV: implementation support
The OECD will prepare a comprehensive action plan to support the swift and co-ordinated implementation of the Two-Pillar solution, with additional support and technical assistance to enhance capacity for implementation by developing countries.
The Inclusive Framework has published a package of documents as part of its ongoing work, including further administrative guidance on the GloBE rules, which also includes two new safe harbours; the GloBE information return; and a report on the STTR.
While every effort has been made to ensure the accuracy of this information, no responsibility for loss or distress occasioned to any person acting or refraining from acting as a result of the material contained in this email can be accepted by the Irish Tax Institute, the designer, authors, contributors or publishers. Professional advice should always be sought for your particular circumstances before acting on any tax issue.
