The Irish Treasury Department published a series of papers on September 16 examining tax policy in the run-up to the 2022 budget, including issues related to corporate tax and international and EU developments.
The international tax paper highlights the potential impact of the upcoming global tax reforms of the OECD / G20 Inclusive Framework. For Ireland, the reforms mean the potential loss of an estimated one-fifth of corporate tax revenues (EUR 2 billion annually) and threatens the country’s 12.5% corporate tax rate, which has been a central part of its economic policy. However, the paper notes that some important questions remain as to how such negotiations will ultimately turn out. Irish Finance launched a consultation in July on the impact of global reforms on the country’s tax policy.
In addition to the EU’s implementation of an OECD agreement, the international tax policy paper highlights other upcoming EU tax developments affecting Ireland. These include the Proposal to Combat Abuse of Mailbox Companies, the Proposal for Public Country-by-Country Reporting and the Proposal for a Common Corporate Tax Base.
The Corporate Tax Policy Update also notes that Ireland continues to work on two measures related to EU Anti-Tax Avoidance Directives: anti-reverse hybrid rules and an interest cap rule. The Ministry of Finance published a consultation on these proposals in July.