Paschal Donohoe (Dublin Central, Fine Gael)

I thank the Deputy. He is making reference to a G7 statement published on 28 June, adopting a common position on a path forward for the OECD agreement. In that statement, the G7 proposed the side-by-side application of the OECD pillar two system, and the US minimum tax rules, which are now under consideration by the OECD inclusive framework. Since January, the US Administration has set out various concerns regarding aspects of the pillar two rules and has proposed a side-by-side solution under which US-parented groups would be exempt from many aspects of the pillar two rules, in recognition of the existing US minimum-tax rules which such groups are subject to. The G7 statement builds on this approach through the agreement of a common approach among G7 countries around a possible path forward. As part of the G7 understanding, the US also agrees to withdraw section 899 retaliatory measures from the USA reconciliation Bill. These measures threaten tax increases against residents of countries that implement the pillar two rules. It is important to note that the statement represents only the views of these countries and does not put forward any proposals on how a side-by-side system would operate. This approach requires very careful consideration and it remains too early to establish what the implications might be in relation to our tax base or the exchequer. Discussions are progressing on a broader OECD inclusive framework, with a view to a potential agreement over the coming months. We remain engaged in that process.

See this speech in context