DUBLIN: Ireland’s annual budget statement was announced by the Minister of Finance on October 11 2016. The minister confirmed Ireland’s commitment to the 12.5% corporation tax rate (a statement which has become a staple in recent budgets) and also confirmed that “nobody is asking for it to be changed”.
In addition, an updated version of Ireland’s International Tax Strategy (the Strategy Paper) was published. In the Strategy Paper, the minister said: “We need to defend the integrity of our tax system; taxpayers need certainty on what their responsibilities are; and we need to defend our sovereign competence in taxation.”
The Strategy Paper recognised the changes that have been made by Ireland to reflect the “significant shifts in the international tax landscape” and it outlined what other changes Irish taxpayers should expect over the coming years:
Ireland’s implementation of the recommendations made under the OECD BEPS Project will continue over the coming years. In this respect, Ireland must consider what changes are needed to the Irish transfer pricing rules to ensure they meet the standards agreed under the BEPS plan;
Ireland has been an active participant in the work on the BEPS Multilateral Instrument, which is due to be available for signature in 2017 – whether or when Ireland will sign the Multilateral Instrument, however, is not confirmed in the Strategy Paper;
The implementation of the EU Anti-Tax Avoidance Directive (ATAD) is regarded as a “significant step” towards the implementation of BEPS. The first implementation deadline for the ATAD is January 1 2019 (with later implementation deadlines for the exit tax and potentially the interest deductibility rules). During 2017, it is expected that Ireland will hold a consultation on the implementation of the various strands of the ATAD;
Ireland has agreed to undertake a review of its corporation tax system during the first half of 2017 and an independent expert has been appointed for this purpose. One of the points to be considered is whether additional steps are required to implement the BEPS recommendations.
