Irish Sovereign Green Bonds Update

OECD's BEPS 2.0 process could impact the business tax landscape globally - agreement may come in mid-2021 Pillar One: proposal to re-allocate taxing rights on non-routine profits The OECD has proposed further corporate tax reform a BEPS 2.0. BEPS 2.0 looks at two pillars. The first pillar focuses on proposals that would re-allocate taxing rights between jurisdictions where assets are held and the markets where user/consumers are based. Under such a proposal, a proportion of profits would be re-allocated from small countries to large countries. Pillar 1 would probably reduce Ireland's corporation tax base. Some estimates place the hit at 5-15% per annum. Nothing has been decided yet. There are disagreements across countries. Recent moves by US have given fresh impetus. Gníomhaireacht Bainistíochta an Chisteáin Náisiúnta National Treasury Management Agency • Pillar Two: proposal for minimum effective global tax rate Pillar Two - the basic idea is to introduce a minimum effective tax rate with the aim of reducing incentives to shift profits. Where income is not taxed to the minimum level, there would a 'top-up' to achieve the minimum rate of tax. It is possible this could be done. country-by-country. The obvious questions arise: what is the appropriate minimum tax rate? who will get the 'top-up' payment? These questions are as yet unanswered. If the minimum rate agreed is greater than the 12.5% rate that Ireland levies, it might erode Ireland's comparative advantage in attracting FDI. Ireland could need to lean on other positives; talented workforce, English speaking, EU access, ease of doing business 21

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