Mr. Seamus Coffey:

Again, IFAC has not assessed Pillar 2 of the OECD's process. On the minimum effective tax, one of the key issues is not so much the rate but how it is to be applied. If it is a global minimum, the impact on Ireland might be modest enough because, if companies are below the global minimum, the top-up would be paid to their countries of residence where their headquarters are based. If, however, the minimum effective tax was applied as a country by country minimum - which seems unlikely at present as the trend seems towards a global minimum effective tax - that would have a modest enough effect on Ireland and would also be likely to have a modest enough effect on the companies. Considering the larger companies that publish their accounts, they are not reporting or generating effective tax rates in single digits. They might not be much above 20% or close to that rate, but most companies have effective tax rates above what would be considered the low levels of single digits. The impact of the minimum tax rate on Ireland, if it is applied on a global basis, could be relatively modest.

Could it stabilise our revenue source? As we said earlier, the biggest driver of the volatility in corporate tax revenues is corporate profitability and having a minimum rate does not really impact on that. If the profits change, the amount of tax to be collected will be paid. There have been issues with the global tax system, but there is probably more likely to be agreement on Pillar 1 and the move to having more tax allocated to the market countries. In the case of digital companies, there probably is a legitimate and strong argument to be made that more of their profits are generated by the customers in the markets rather than by the developers and software engineers. The impact of the minimum effective tax rate, depending on whether it is agreed, probably will not offer that stabilising force that it might be suggested it could.