Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Ireland’s corporate tax policy, and broader industrial strategy, has consistently focused on attracting real and substantive investment that brings jobs. The 12.5% headline rate of corporation tax has not changed in almost two decades and this has been a key component of the recent economic success of the country.  It should be noted that Ireland’s FDI attractiveness is based on more than just tax. This complements our highly educated young workforce, common law legal system, access to the EU Market, and other factors which combine to make Ireland an attractive location for FDI.

Ireland signed up to the OECD two-pillar solution in October 2021 and we intend to follow through on that commitment. Our long-standing position is that the international tax system needs to keep pace with changes in how business is now being conducted globally.

The agreement achieved at OECD is a fine balance that provides the certainty and stability required for economic growth while at the same time protecting the interests of all countries both big and small, developed and developing. Implementation of the agreement will bring much needed stability to the international tax framework after the turbulence and uncertainty of recent years.

The agreement will continue to allow our tax system to support innovation and growth with the 12.5% corporation tax retained for companies with a turnover below €750m annually, and the retention of the existing R&D tax credits.

The EU Minimum Tax Directive will implement Pillar Two in the EU. This Directive will be significant in ensuring that there is a consistent application of the OECD agreement on the minimum tax across all Member States and in accordance with EU law, and thus will play an important role in safeguarding Ireland's competitive tax regime.

We look forward to final agreement of the Directive in due course and are progressing with our preparations for domestic implementation by the proposed deadline of end 2023.

Ireland retains long-standing reservations regarding tax harmonisation at an EU level and we will continue to carefully consider any proposal tabled by the Commission.  It should also be noted that the Oireachtas legislates for tax measures on an annual basis through the Finance Bill.