The Minister for Finance, Paschal Donohoe, has reaffimed Ireland's commitment to the 12.5% corporation tax rate.
"Over the course of this year just under €7.5 billion in corporation tax receipts has been generated for the Exchequer to-date - revenue which has played an essential role in funding pandemic related expenditure," Minister Donohoe said.
The Minister said he will publish an update on Ireland's Corporation Tax Roadmap which will outline further areas for consideration, consultation and action over the coming months and years.
He said the update on the Roadmap will also consider further the reports published by the OECD BEPS Inclusive Framework just yesterday on its work to address the tax challenges of digitalisation.
"Further work is needed at international level before final agreements can be reached," he said. "What is certain however is that change is inevitable."
The Minister acknowledged that agreement at the OECD would present challenges for Ireland as changes to the international tax framework would see a reduction in the level of profits taxable here. Failure to reach agreement at the OECD would also have negative consequences for the Exchequer.
This work will reach a crucial stage next year, he said. Decisions will be needed and the future direction of the global and European corporation tax landscape will be decided upon.
"In this context, to ensure that Ireland's tax regime for intellectual property is fully consistent with international best practice, I am amending the legislation to provide that all intangible assets acquired after today will be fully within the scope of balancing charge rules. I will be moving a Financial Resolution to allow this change to take immediate legal effect."
While the new rules are not expected to result in significant additional tax revenue given the current profile of claims, they will ensure that the tax regime for intellectual property, together with the broader corporation tax regime, remains competitive, legitimate and sustainable.
The Minster said as part of the Government's commitment to international tax reform, we have been transposing the EU Anti-Tax Avoidance Directive, or "ATAD", since Budget 2019 and will continue to do so next year with the introduction of interest limitation and anti-reverse-hybrid rules.
"I will be making a technical amendment this year to our ATAD-compliant Exit Tax rules to clarify the operation of interest on instalment payments. This clarification will be introduced with effect from tonight, by way of Financial Resolution," he added.
