Mr. Niall Cody:

I remind the Deputy that I cannot talk about policy matters. I mentioned the challenges we face earlier. Taking it that the directive will be adopted and will apply to accounting periods that begin after 31 December 2023, it will be legislated for in the finance Bill next year. There will be a significant body of legislation required. A significant redesign of our corporation tax will be required because it affects a small number of cases in pillar 1. In pillar 2, we think there are in the region of 70 or so Irish-headquartered entities, with about 1,700 companies out of that. There are probably about 1,700 non-Irish-headquartered entities, with about 7,000 to 8,000 entities off them. We are probably talking about 10,000 entities in scope. Some of those are non-trading, but there is a significant level of engagement.

We have to design a reporting system that will have to be consistent with the EU and the OECD, because this will form the basis of a reallocation to ensure the minimum 15% is paid across each jurisdiction. Then there will have to be transparency for other countries. If you take it that the accounting year will start on 1 January 2024 and the year end will be 31 December 2024, that will be the first full year of accounting. The normal corporation tax reporting for that entity will be September 2025. The pillar 2 agreement provides for reporting on the pillar 2 element 15 months after the end of the accounting period. In the first year or two, that will be 18 months. We will have our normal corporation tax reporting after nine months, and then nine months hence there will be the pillar 2 process. We have to develop a corporation tax reporting system to reflect that report. We have to develop our IT systems and engage with business and their accounting systems have to tie in with ours. A big challenge for us in pillars 1 and 2 is that they rely on accounting principles as opposed to the tax principles and computations we are used to. There is a significant capacity and skills-building process that we will need.

On additional people, in recent years we have significantly increased the resources and numbers working in the: international tax; business tax policy and legislation; large corporates; and medium enterprise divisions, which are the four divisions that will be impacted by this. I am conscious that the Deputy was asking questions on Committee Stage about resourcing and whether we are adequately resourced. As long as I have been in this job, we have been hugely supported in the context of any case we made. The challenges are significant, however. Since 2018, some 3,000 people have left our organisation, mostly through retirement. I do not know why I pointed at myself, but that reflects the demographic of where we are. Some 3,500 people have joined our organisation in those five years. The challenge for us is that bringing people in on their own is not sufficient. There is a development process involved and you cannot bring in too many people at the same time.

I see two big challenges for us over the next few years. The first is the continued investment in technology. Members have talked about what we have been able to do but we have ambitious plans in technology and the corporation tax modernisation because the worst thing we could do is implement pillar 2 for 15 months without looking at corporation tax reporting. We have to use that opportunity, go in there and do a real refresh. What happens with systems is-----