Michael McGrath (Cork South Central, Fianna Fail)
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The Deputy will recall that a Government decision was taken for Ireland to sign up to the global agreement on a two-pillared solution at the OECD Inclusive Framework to address the tax challenges associated with the digitalisation of the economy in October 2021. Pillar Two of that agreement will see the implementation of a global minimum tax of 15%.

This decision was not taken lightly and came on the back of a broad public consultation process that sought the views of interested parties, including stakeholders from the business community.

At EU level, the Minimum Tax Directive has been agreed by all EU Member States. The Directive ensures that there is a consistent application of the minimum tax across all Member States. Therefore, all EU Member States are legally bound to transpose the EU Minimum Tax Directive.

The UTPR is designed to operate as a backstop to the IIR which itself comes after the QDTT in the globally agreed rule order. A transitional UTPR Safe Harbour has been developed at the OECD. It recognises the challenges facing jurisdictions in implementing Pillar Two by providing a limited additional grace period of one further year in certain limited circumstances before the UTPR takes effect.

It will provide that, where the ultimate parent entity (UPE) of an MNE is located in a jurisdiction that has not implemented Pillar Two rules, and where that jurisdiction applies a domestic corporate income tax rate of at least 20%, the UTPR does not apply in respect of the UPE and any other group entities in that UPE jurisdiction for that additional year.

Analysis of the impacts on all stakeholders has been considered throughout the implementation process, including at the OECD through public consultation and stakeholder engagements undertaken by the secretariat and also domestically through the two feedback statements published this year.

My officials and I continue to keep the impacts under review. Ireland will continue to play to the strengths of its wider offering beyond the tax system, a dynamic well-educated English speaking workforce, our common law legal system and business friendly environment, seeking to ensure our continued competitiveness in light of the impacts of Pillar Two implementation.