Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Deputy for his question on this very important topic. At least he has a recognition of the value of organisations like the OECD. As to where we are, as the Deputy outlined Ireland signed up to a global tax deal. We did so in October 2021, as he is aware. That was part of an overall inclusive framework on base erosion and profit shifting as part of the G20 and OECD agreement. Ireland signed up to this as a pragmatic and sensible approach to address global uncertainty and provide the positive conditions and long term certainty for businesses and investors to prosper and grow.

Pillar 1 is a package comprised of amount A, which will see an allocation of taxing rights to market jurisdictions, and amount B, which will see a simplification of transfer pricing rules. Technical work on pillar 1 is well advanced, but there are a number of outstanding issues on amount B that have led to the emergence of a political impasse on the package as a whole. The implementation of pillar 2 of the agreement is more advanced. That refers to the minimum effective tax rate, which the Deputy is aware of. We have implemented this along with major economies such as Japan, the UK, South Korea, Canada and Australia and many of the other economies within the European Union through the minimum effective tax directive.

I note the decision of the US Administration in relation to the OECD agreement and the presidential memorandum issued on 20 January. This is of course a regrettable decision, but opportunities exist to engage with the new administration to explore a path forward. The Deputy asked how we will do that. The best framework for doing that continues to be inside the OECD. I very much hope President Trump's Administration can see the benefits of an organisation like that which contains so many developed economies across the world. The second, very brief, point is we should continue to strengthen our participation in the OECD through the work of the European Union. These are the kind of issues we will be discussing in Brussels on Tuesday in particular.

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