On the 14th of January 2021, the Irish Government published its update to Ireland’s Corporation Tax Roadmap. Minister Donohue explained in his foreword that he published the Corporation Tax Roadmap in 2018 to provide a clear indication to stakeholders of the actions that Ireland would take to ensure that our corporation tax system remained competitive, fair and sustainable.
This update now provides an opportunity to take stock of the significant actions Ireland has taken to date as part of its international tax reform. Meeting its commitments set out in the 2018 Roadmap, whilst also setting out Ireland’s key commitments to further actions.
The update signals a series of further policy considerations and the consultations which will take place to ensure that key stakeholders will have an opportunity to provide input into the development of policy over the coming months and years.
The update sets out Ireland’s commitment to:
- Implement interest limitation rules in accordance with the ATAD standard;
- Legislate for new international tax transparency rules for digital platforms;
- Legislate for reverse hybrids about ATAD anti-hybrid rules;
- Adopt the authorised OECD approach for transfer pricing of branches;
- Consider actions that may be needed in respect of outbound payments from Ireland and the wider withholding tax regime;
- Strengthen the domestic stakeholder engagement process.
The Government has confirmed its commitment to Ireland’s corporation tax regime. It will remain competitive, fair and sustainable with the 12.5% rate at its core.
The publication of this update enables Ireland to set out the next steps in the ongoing process of modernising and further strengthening its corporation tax system.
Ireland and the roadmap commitments
The key commitments and timelines
Below is a summary of the 12 commitments set out in the update which Ireland has committed to and the expected timelines. It is worth noting that 1-5 are existing commitments from the 2018 roadmap which require further action, whilst 6-12 are further commitments to action, consult and consider:
Each commitment is discussed in further detail as follows:
The future for Irish corporation tax
It is evident from the details set out in the update to Ireland’s corporation tax roadmap that Ireland is fully committed to continue in implementing the necessary tax measures to prevent aggressive tax planning.
Similarly, the Irish Government is committed to consulting with stakeholders for their feedback on the impact of these measures through a formal engagement process, to ensure reforms are well designed and sustainable.
This work is ongoing, Ireland will continue to take a proactive, consultative approach in modernising its corporation tax system to enable it to be well-positioned for the changing environment.
Published: February 2021