Bernard Durkan (Kildare North, Fine Gael)
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88. To ask the Minister for Finance the extent to which he remains satisfied that revised European taxation rules will apply in such a way to not dissuade foreign direct investment here. [36709/24]

Jack Chambers (Dublin West, Fianna Fail)
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Taxation remains one of the most effective policy levers available to any Government, and it is the prerogative of each EU Member State to develop a tax mix appropriate to their particular economy. Ireland has always maintained that tax competition is an important policy tool, particularly for smaller Member States, provided that competition is fair and based on substance.

To that end, Ireland has always been- and continues to be- a strong proponent of tax sovereignty, and accordingly of unanimity in tax matters at EU level. Having said that, Ireland has shown that we are willing to engage with and agree to EU tax directives that seek to improve the single market and implement agreed international best practices in a consistent manner across the EU. The need for unanimous agreement on tax matters at EU level did not impede the agreement of more than 20 taxation proposals over the lifetime of the last Commission, including important Directives on the EU minimum tax, VAT, administrative co-operation, Anti-Tax-Avoidance and most recently the FASTER directive on withholding tax procedures.

Throughout negotiations on these files, Ireland has consistently maintained the principle that matters of direct taxation remain a Member State competence under the treaties, and tax harmonization is contrary to that principle. On this basis I am satisfied that taxation is, and will continue to remain, a national competence for EU Member States.

Ireland is a proponent of multilateralism as the best solution to address global tax challenges and this is what underpins our position on EU tax matters. Our decision to join the Two-Pillar Agreement at the OECD to address the tax challenges arising from digitalisation of the economy recognises how large businesses across the globe now operate commercially in a digital environment and generate value. These rules are designed to update the international tax framework to keep pace with these developments in a coordinated way.

At a domestic level, Ireland introduced legislation to implement Pillar Two via the transposition of the EU Minimum Tax Directive in Finance (No. 2) Act 2023, with the Pillar Two rules coming into effect from 31 December 2023. Ireland, along with the vast majority of EU Member States and more jurisdictions globally, have begun applying the minimum effective tax rules, and further jurisdictions have specific commitments to bring the rules into effect by the start of 2025. Ireland remains deeply engaged in the remaining work to implement Pillar Two globally and to finalise Pillar One of the agreement. This approach recognises that global implementation of the agreement remains the best opportunity to bring much-needed stability to the international tax landscape, providing a sound and stable platform for future investment.

Finally, I would note that taxation is just one of many policy levers available to the Government in seeking to promote foreign direct investment. Ireland has many other strengths, including a forward looking business environment, a whole-of-Government approach to ensuring we remain agile and competitive, and an educated and dynamic workforce who have consistently delivered innovation and profitability over many decades for businesses that have made Ireland their home.