Gerald Nash (Louth, Labour)
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92. To ask the Minister for Finance his views on the agreement reached between the G7 and the United States in relation to the OECD's global minimum corporation tax rate proportion for large MNCs; his views on the implications for Ireland's corporation tax base, the Exchequer more generally, and inward investment; and if he will make a statement on the matter. [39703/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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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.

Gerald Nash (Louth, Labour)
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I thank the Minister for his response. I note the publication of that statement and that he has placed on the record of the House that at this stage, this is an understanding. At the time, my recollection is that he welcomed the removal of section 899 retaliatory measures and that is very important for businesses. We have to remember that Ireland has significant foreign direct investment in the United States. This has been described as a form of opt-out for the US. Does the Minister believe this may have worrying implications for the remainder of the OECD deal? This may very well heap more uncertainty on the uncertainty we are already experiencing around the type of tariff regime the US Administration may like to see implemented.

Paschal Donohoe (Dublin Central, Fine Gael)
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The short answer to the Deputy’s question is that this agreement does have consequences for the OECD agreement overall. There are three in particular. The first is what this means for competitiveness of economies and countries that remain fully inside pillar two. The second is how other economies and important stakeholders in the OECD agreement will respond, given the actions that have been taken by the US, and the third issue is how a side-by-side framework will be implemented technically given that so many of these companies, which are large investors and employers in Ireland, need certainty regarding how tax law is executed. Those are three important issues we have to carefully consider. I hope given the G20 discussions that are under way this week and what will happen in the OECD, I will be at a point of being able to give a fuller answer to those questions over time.

Gerald Nash (Louth, Labour)
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I appreciate this is a bit of an moveable feast but there are uncertainties. The G20 nations were the guardians of the OECD deal originally. The OECD adopted it and we adopted it. I welcomed at the time that we adopted the process ourselves. That was not without risks for Ireland. It was a welcome thing to do. Because the framework of this deal is subject to EU legislation, I assume EU legislation will require to be changed to accommodate this agreement if indeed there is an agreement. That will require unanimity. The likelihood is there will be unanimity because many of the G7 nations such as France, Germany and Italy and so on are part of the G7 group. What is the Minister’s view on that? Will it require legislation that will ultimately have to be adopted by this House if it is to come to pass?

Paschal Donohoe (Dublin Central, Fine Gael)
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It is possible it could require action at EU level but I cannot give the Deputy a definitive answer to that yet. The reason for that is that what I have seen is the publication of a general agreement on how the US would engage in the OECD framework that raises many questions. At this point in time, I cannot give the Deputy a definitive answer regarding how that agreement will be executed and whether the change would be needed. I believe, just as we entered into the OECD agreement after very careful consideration and taking time to work our way through it, we should also take time to fully understand this agreement and what the consequences of it will be, in conjunction with other stakeholders and partners. As I do that I will of course answer the Deputy's questions and those of the Joint Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation, and Taoiseach on what I accept is a very important policy matter.