Ireland was not among 130 countries that yesterday (1 July) committed themselves to proposals aimed at reforming of the international tax system.

A framework drawn up by the OECD, which includes two separate ‘pillars’, is aimed at ensuring that multinational companies pay “a fair share” of tax wherever they operate.

The remaining elements of the framework, including the implementation plan, are due to be finalised in October.

Reservations

A statement from the Department of Finance said that Ireland fully supported the ‘pillar one’ proposals, which would shift some taxes from multinationals’ home countries to markets where they have business activities and earn profits, regardless of whether firms have a physical presence there.

Ireland has reservations, however, about ‘pillar two’, which includes a proposal for a global minimum effective tax rate of “at least 15%”.

Minister for Finance Paschal Donohoe (pictured) said that, while he had expressed Ireland’s reservations, the Government remained committed to the process.

“Ireland will continue to play our part in reaching a comprehensive and, indeed, historic agreement,” he said.

Minister Donohoe had previously warned that Ireland would have to prepare for changes to the international tax system that could affect the country’s corporation tax take. The Government said that, while the ‘pillar one’ proposals would reduce tax receipts, they would also bring “stability and certainty”.