Investor Presentaiton
OECD's BEPS process may impact FDI offering
Pillar Two due for EU implementation in 2024, Pillar One still to be ironed out
Pillar One: proposal to re-allocate taxing rights on non-
routine profits
▸ Over 130 countries have signed on for the BEPS 2.0 two-
pillar set of reforms.
The first pillar focuses on proposals that would re-allocate
some taxing rights between jurisdictions where companies
reside 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 will reduce Ireland's corporation tax base. Some
estimates place the hit at c. €2bn per annum by the middle
of the decade.
Ireland has always been fully supportive of Pillar One
despite the implied cost to the Exchequer.
Pillar Two: 15% minimum effective global tax rate
▸ Countries will 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
will be a 'top-up' to achieve the minimum rate of tax.
▸ The EU have agreed a directive to implement the 15% rate
in 2024
▸ The minimum rate is greater than the 12.5% rate that
Ireland levies and thus some of Ireland's comparative
advantage in attracting FDI will be lost. However Ireland's
rate will remain one of the lowest in EU.
▸ Ireland can lean on other positives; educated and young
workforce, English speaking, EU access, and ease of doing
business
Gníomhaireacht Bainistíochta an Chisteáin Náisiúnta
National Treasury Management Agency
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