On 31 March 2023, the Irish Department of Finance published a public consultation document on the transposition of the OECD Pillar Two global minimum tax rules in line with EU Council Directive 2022/2523 of 14 December 2022. The consultation period will run to close of business on Monday 8 May 2023.
The Directive obliges EU Member States, including Ireland, to transpose its provisions into domestic legislation by 31 December 2023. It is planned to deliver this legislation in Ireland as part of the autumn 2023 Finance Bill.
In October 2021, Ireland, along with over 130 other countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Sharing (BEPS), signed up to a historic agreement to reform the international tax framework as it applies to large corporate groups. Building on the original BEPS project, the agreement contains a Two Pillar solution to address the tax challenges arising from digitalization and globalization.
Pillar Two of the Agreement primarily consists of two interlocking rules, together referred to as the Global anti-Base Erosion (GloBE) rules. These rules, as reflected within the EU in the Pillar Two Directive, require Member States to introduce a global minimum effective tax rate of 15% for corporate groups with annual global turnover of at least EUR 750 million. This minimum rate will apply in each jurisdiction in which the group operates, and will be calculated on an adjusted accounting measure of profit.
