Gerald Nash (Louth, Labour)
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726. To ask the Minister for Finance the projected additional corporation tax yield in 2026 from the increase in the rate to 15% under Pillar Two of the OECD BEPs project; the cost of the proposed G7 side by side system will be; if any modelling or projections have been carried out by his Department on this; and if he will make a statement on the matter. [43804/25]

Gerald Nash (Louth, Labour)
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727. To ask the Minister for Finance if the Finance Bill will include amendments to provide for the agreement at the G7 on the side by side system for US parented groups under Pillar Two; and if he will make a statement on the matter. [43805/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 726 and 727 together.

Ireland, alongside more than 140 other jurisdictions, made a political agreement to sign up to the two-pillar international tax agreement, with the objective of addressing the tax challenges arising from digitalisation of the economy at the OECD Inclusive Framework on BEPS.

Pillar Two of this agreement includes a commitment to introduce a 15 per cent global minimum effective tax rate for multinational enterprises with an annual turnover in excess of €750 million, located in in-scope jurisdictions, through the GloBE Rules. Ireland, together with EU Member States, has implemented Pillar Two by transposing the EU Minimum Tax Directive in 2021. In addition, more than 60 other jurisdictions have implemented Pillar Two, with many others having published draft legislation or announcing their intention to apply Pillar Two rules in the near future.

In January this year the US administration issued an Executive Order regarding the OECD Agreement and raised a number of concerns with the application of the OECD Pillar Two rules. Subsequently, the G7 published a statement adopting a common position on the OECD Agreement on 28th June, which proposes a side-by-side application of the OECD Pillar Two system and the US minimum tax rules. The G7 statement sets out the G7 Members’ views on a common approach to this proposed ‘side-by-side’ solution. As part of the G7 joint position, the US agreed to withdraw Section 899 retaliatory measures from the US Reconciliation Bill (passed on 4th July).

However, as the G7 statement does not set out technical proposals to address side-by-side implementation. A significant amount of detailed work is required to design technical solutions and assess the economic impact and policy implications of what side-by-side application of the various global minimum tax rules may mean in practical terms. The G7 statement recognises that these discussions must take place in the Inclusive Framework with a view to expeditiously reaching a solution that is acceptable and implementable by all. That work has recently commenced at the OECD and as such, it remains too early to establish what the implications might be in relation to Ireland’s tax base or the Exchequer, or to model any proposed solutions, at this point.

My Department updates its fiscal projections twice a year, in the spring and autumn. The most recent set of forecasts, published in the Annual Progress Report at the beginning of May, retained previous estimates due to the uncertainty that continues to exist on this issue. Those forecasts incorporate a net loss of €2 billion from the OECD BEPs project which includes both pillars of the global minimum tax agreement from 2026 onwards. Estimating the potential impact of the OECD agreement represents a considerable and on-going challenge, not least due to the fact that the negotiations are still ongoing, including on issues of substantial importance as set out above. My Department will produce a full set of fiscal projections as part of Budget 2026 in the autumn.

As I have previously said, it will be critically important to ensure that minimum tax rules are applied in a consistent manner across jurisdictions and that there is no negative impact on the competitiveness of those implementing the full Pillar Two rules. A key issue to be navigated will be the question of providing a level playing field for businesses operating globally and we welcome the core principles accepted in the G7 statement on this element.

Ireland is fully engaged in discussions with international partners to find a solution, including at the EU, the OECD Inclusive Framework, and the G20. When a solution is reached, this will be assessed to consider whether Finance Bill amendments may be required to in order to implement it.