Ireland Publishes Updated International Tax Strategy
The Irish Government has published an update on its International Tax Strategy, in which Finance Minister Michael Noonan stresses that the country is “well positioned for the post-base erosion and profit shifting (BEPS) world.”
According to Noonan, “This is not something that has happened by accident. Difficult but necessary changes to our residency rules have enabled us to manage change on our own terms and in a way that provides certainty for those affected. While the Organisation for Economic Cooperation and Development (OECD) BEPS actions may present challenges for policymakers and businesses around the world, there are also opportunities for countries like Ireland, where the alignment of tax and substance has been a long-standing feature of our economic and international tax policy.”
The updated International Tax Strategy commits the Government to maintaining the 12.5 percent corporate tax rate. It states that Ireland is likewise committed to the full exchange of tax information with its tax treaty partners, and to the global exchange of tax information in line with existing and emerging OECD and European Union (EU) rules.
Ireland will actively participate in the EU’s Code of Conduct and the OECD’s Forum on Harmful Tax Practices, and play its full part in implementing the OECD’s BEPS recommendations. The Government is legislating for country-by-country reporting in accordance with the OECD standards.
As the Strategy explains, the Government will introduce a Knowledge Development Box (KDB) with a 6.25 percent corporate tax rate for income derived from intellectual property. According to Noonan, “The KDB will be the first and only box in the world to meet the tough new standards of the OECD’s ‘modified nexus’ approach. Our commitment to the OECD standard provides long-term certainty to taxpayers at a time when many international businesses are re-evaluating their structures and investment choices to compete and succeed in a post-BEPS world.”
The Strategy also states that the Government will reject the introduction of measures in national legislation that could constitute harmful tax competition, and eliminate any measures that are found to be harmful.
