Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputy. I am not going to go into any detail in terms of commentary about any other jurisdiction. I do think it is important to clarify that at the meetings in Luxembourg which I attended, Secretary Yellen confirmed that there are open issues in respect of pillar 1 of the OECD agreement, which concerns the reallocation of taxing rights, which will delay the US signing up to that aspect of the agreement into next year. The comments did not relate to the adoption of the global minimum tax under pillar 2 implementation, which the Biden Administration continues to support.

On the question of Ireland moving ahead of the world, I do not believe we are. It is important to put on record that pillar 2 legislation is already in place in a number of jurisdictions, including our nearest neighbour, the UK, South Korea, Japan. Pillar 2 is in the process of being enacted and is at least at draft legislation stage in over 20 countries as well as Ireland, including Austria, France, Germany, Italy, Netherlands, Denmark, Norway, Sweden, Finland, Luxembourg, Canada and New Zealand. Of those implementing pillar 2, like Ireland, most jurisdictions have confirmed their intention to implement a QDTT in order to collect the top-up tax themselves arising in their borders. Those who have so confirmed include most EU member states in addition to the UK, Australia, Canada, Norway and Switzerland.

It is important to cut to the core of the issue the Deputy is raising. I am very much aware of the concerns that have been expressed. Both I and my Department have engaged with some firms who have made that case. We very much understand the issues that arise. To clarify, pillar 2, including the income inclusion rule, comes into effect at the end of 2023, and the UTPR a year later at the end of 2024. The transitional UTPR safe harbour comes in at the end of 2025. The safe harbour has been specifically agreed for one year only. I think the Deputy was looking for an assurance on that point. To extend it beyond that one year would need the agreement of 140 countries in the OECD inclusive framework. That is the position in respect of those issues.