Ireland updates its international tax strategy

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Ireland updates its international tax strategy

Ireland updates its international tax strategy

Ireland's annual budget statement was announced by the Minister of Finance on October 11 2016. The minister confirmed Ireland's commitment to the 12.5% corporation tax rate (a statement which has become a staple in recent budgets) and also confirmed that "nobody is asking for it to be changed".

duffy.jpg
hogan.jpg

Joe Duffy

Shane Hogan

In addition, an updated version of Ireland's International Tax Strategy (the Strategy Paper) was published. In the Strategy Paper, the minister said: "We need to defend the integrity of our tax system; taxpayers need certainty on what their responsibilities are; and we need to defend our sovereign competence in taxation."

The Strategy Paper recognised the changes that have been made by Ireland to reflect the "significant shifts in the international tax landscape" and it outlined what other changes Irish taxpayers should expect over the coming years:

  • Ireland's implementation of the recommendations made under the OECD BEPS Project will continue over the coming years. In this respect, Ireland must consider what changes are needed to the Irish transfer pricing rules to ensure they meet the standards agreed under the BEPS plan;

  • Ireland has been an active participant in the work on the BEPS Multilateral Instrument, which is due to be available for signature in 2017 – whether or when Ireland will sign the Multilateral Instrument, however, is not confirmed in the Strategy Paper;

  • The implementation of the EU Anti-Tax Avoidance Directive (ATAD) is regarded as a "significant step" towards the implementation of BEPS. The first implementation deadline for the ATAD is January 1 2019 (with later implementation deadlines for the exit tax and potentially the interest deductibility rules). During 2017, it is expected that Ireland will hold a consultation on the implementation of the various strands of the ATAD;

  • Ireland has agreed to undertake a review of its corporation tax system during the first half of 2017 and an independent expert has been appointed for this purpose. One of the points to be considered is whether additional steps are required to implement the BEPS recommendations;

  • The Strategy Paper refers to the proposed relaunch of the EU common consolidated corporate tax base (CCCTB), stating that "Ireland will engage fully in discussions on this proposal while assessing whether it is in our best interest". In regards to other EU corporate tax developments, it robustly states its position: "Ireland continues to disagree with any harmonisation of tax rates, minimum levels of taxation, or the inappropriate encroachment of state aid rules into the core member state competence of taxation";

  • Ireland reaffirms its commitment to tax transparency in the Strategy Paper noting that Ireland has been a supporter of the changes made to the European Directive on Administrative Cooperation, providing for automatic exchange of information in relation to tax rulings issued by tax authorities in EU member states and the automatic exchange of country-by-country reports. Ireland is also a supporter of a further change that will give tax authorities in EU member states access to "know your customer" information held by financial institutions; and

  • The Strategy Paper recognises the potential impact that Brexit will have on Ireland and that the economic impact will ultimately depend on the future relationship between the EU and the UK. Ireland is in the process of becoming "Brexit Ready" and in this respect a further policy paper was published outlining Ireland's initial responses to Brexit.

The Finance Bill implementing the changes announced in the budget statement was published on October 20 and will likely be enacted before the end of 2016. The changes identified in the Strategy Paper will not be made until later years.

Joe Duffy (joe.duffy@matheson.com) and Shane Hogan (shane.hogan@matheson.com)

Matheson

Tel: +353 1 232 2688 and +353 1 232 2453

Website: www.matheson.com

more across site & shared bottom lb ros

More from across our site

Tax auditors themselves had not been aware of the new TP ‘transaction matrix’ requirements, ITR hears as five German partners share their client experiences
Its features include a built-in AI assistant as well as expert insights and commentary from Deloitte specialists
AI is rapidly finding its way into tax advisory services. But how can AI be deployed responsibly, reliably, and in compliance with legal standards?
Specified taxpayers will have to apply a 19% VAT rate on services offered by third parties through their platforms; in other news, Donald Trump imposed 30% South African tariffs
A ‘quiet revolution’ in HMRC’s compliance strategy has caused Adam Craggs to rethink how to advise clients, he tells ITR
If the Reform leader becomes UK prime minister then he may follow the direction of the US in at least one significant way
Trump declared a new national emergency in issuing the order; in other news, Grant Thornton Germany is up for sale and the subject of interest from both its UK and US counterparts
The judgment, which saw Denmark's Supreme Court rely on OECD TP guidance, sets aside more than 15 years of consistent administrative practice, experts have told ITR
Belgium’s new coalition government has gone ahead with a new exit tax regime that could land it in the courts
Brazil’s government has not officially framed the bill as a countermeasure amid trade tensions with the US, but the move is being considered as part of Brazil’s strategic response, one expert tells ITR
Gift this article