The Government has launched a fresh consultation phase on how an EU directive on minimum tax rates for multi-national companies should be transposed into Irish law.

In March, a first feedback statement set out the Government’s proposed approach to key elements of the legislation and the implementation of the new rules.

The EU Minimum Tax Directive, which is also known as the Pillar Two Directive, emerged from an international tax agreement at the Organisation for Economic Co-operation and Development (OECD), which included a minimum tax rate of 15% on the profits of large multi-nationals.

Top-up tax 

The Department of Finance has now published a second Feedback Statement on the process and is asking for responses by close of business on Monday 21 August.

The preferred means of response is to by email, and the address is businesstaxpolicy@finance.gov.ie.
 
The latest statement includes draft approaches to further elements of the legislation – including the proposed approach to a Qualified Domestic Top-up Tax (QDTT), and consultation questions on a range of technical and policy issues.

The department said yesterday (27 July) that work on transposing the directive was continuing, with legislation to be included in the autumn Finance Bill 2023.

Further guidance

It added, however, that the design of the domestic legislation was “an evolving process”, as OECD negotiations had been continuing on some aspects of the administration of Pillar Two.

On 17 July, the OECD released further guidance covering a number of areas, which the department said would help provide tax certainty for businesses. The organisation has also released a revised version of a standardised return for companies covered by the new rules.

Minister for Finance Michael McGrath (pictured) described the statement as a further important step in the process of transposition, adding that it marked “Ireland’s continuing commitment to delivering on agreed international tax reforms”.