On 14 January 2021, The Minister for Finance, Paschal Donohoe, published an update to Ireland’s 2018 Corporation Tax Roadmap. Anna Scally and Cillein Barry of our Tax practice examine this update below.
The purpose of the Roadmap is to provide all stakeholders with an indication of the actions that Ireland will take to ensure that the Irish corporation tax system remains competitive, fair and sustainable.
The update takes stock of the changing international tax environment, outlines the significant actions Ireland has taken to date and the further actions that will be taken over the coming years.
The update is being published in the context of discussions at International level on the reform of the International Tax Framework (commonly referred to as BEPS 2.0), which are expected to come to a conclusion in mid-2021 (further information on the OECD BEPS 2.0 proposals is available here).
Publishing the Roadmap Update, Minister Donohoe reaffirmed Ireland’s commitment to the 12.5% corporation tax rate and to a ‘competitive, fair and sustainable’ corporation tax regime.
The Minister also reaffirmed Ireland’s position on BEPS 2.0 that “It is vital to have a consensus-based, globally agreed approach to international tax. Tax rules need to continue to evolve to match the modern world, and that evolution can best take place through international agreement at appropriate institutions such as the OECD”.
The Roadmap, accessible here, outlines the range of commitments for 2021 and 2022 – summarised below.
KPMG welcomes the publication of the update to Ireland’s Corporation Tax Roadmap. This roadmap is critical in providing a sound base for future investment in the country. We believe that Ireland’s tax regime will continue to remain competitive in the context of Ireland’s comparative attractiveness as a location for business. It is welcomed that the Minister for Finance has again reaffirmed Ireland’s commitment to the 12.5% rate of corporation tax and a fair, competitive and sustainable regime.
Ireland has embraced international tax reform and the roadmap provides clarity around when additional changes will be introduced. The tax reform that we have seen, and will continue to see, impacts all Irish businesses. It is welcome that Government will seek feedback from stakeholders as part of the detailed implementation of the announced measures. KPMG remains committed to actively engaging in providing feedback on the impact of measures for business.