From January, significant amendments to corporate taxes to come in effect

From January, significant amendments to corporate taxes to come in effect

Minister for Finance Michael McGrath has announced that a new corporate tax rate will be implemented in Ireland from January 2024, which is an important milestone in the history of Irish taxation.

This week, he declared that the OECD agreement brought about two planned changes, both of which Ireland has agreed to. The agreement was signed by more than 130 countries and consists of two main components.

He mentioned that numerous alternatives were taken into account for the Pillar 2 component of the OECD deal.

We have concluded that corporates with a turnover of €750m or more will be subject to a 2.5% qualified domestic minimum top-up tax.

He announced that the Autumn Finance Bill will include legislation regarding the matter, and a Feedback Statement was released in response to the consultation.

The work is intricate and time-consuming. We have released elemental information regarding the legislation that needs to be implemented.

He stated that the tax rate for large corporates has changed from 12.5% to 15%. This change has been in effect for some time.

He mentioned that the OECD deal's Pillar 1 would result in a redistribution of taxing rights.

Our department's analysis shows that Pillar 1 could have a detrimental effect on Ireland due to its comparatively small domestic market compared to other countries.

He mentioned that Pillar 2 is more advanced than the previous version and that the OECD is in the midst of deeper discussions about it.

Ireland is actively participating in the negotiations & influencing the decisions being made. The outcome of the discussions remains uncertain, and it is yet to be seen when a conclusive decision will finally be reached.

He stated that Pillar 2 could be implemented first.

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