Trust Bloomberg Tax for the international news and analysis to navigate the complex tax treaty networks and global business regulations.
By Ali Qassim
The Irish government is inviting businesses and practitioners to provide feedback on its plans to update its international tax strategy, including how Ireland should incorporate the OECD’s transfer pricing guidelines into national law and implement the European Union’s anti-tax avoidance rules.
The consultation, which runs until the end of January 2018, aims to “set out a roadmap for where Ireland is going between now and the end of 2020, and identifies concrete steps that we will take over that timeframe,” Finance Minister Paschal Donohoe said Oct. 10.
Ireland’s finance chief launched the widely anticipated consultation alongside the annual fiscal budget. The government announced immediate changes in the budget, including a new limit to the amount of income against which capital allowances for intangible assets businesses can deduct in a tax year, as well as an increase on stamp duty on commercial transactions.
The proposals act on recommendations made by Irish Fiscal Advisory Council Chairman Seamus Coffey last month to act on key elements of the Organization of Economic Cooperation and Development’s base erosion and profit shifting initiative and the EU’s anti-tax avoidance project.
“These highly technical areas have implications for every Irish business operating internationally,” Joe Bollard, head of iInternational tax at EY Ireland told Bloomberg BNA. “Therefore, the outcome of the consultation is important to maintaining competitiveness of Ireland’s regime.”
Kevin Doyle, a partner and international tax coordinator at Dublin-based BDO, agreed that the consultation shows that the government understands that “with so much change ahead, Ireland must compete, not only on the rate, but on the ability to offer certainty.”
Ireland’s international competitiveness revolves around its 12.5 percent corporation tax rate, the lowest among OECD nations.
Businesses are being asked for input on how to implement Actions 8, 9 and 10 of the OECD base erosion and profit shifting project, which would require revisions to transfer pricing rules in Ireland.
In its consultation document, the government is seeking comment on “what are the key considerations” when incorporating these actions into Irish law.
The government is also asking, as Coffey recommended in his report, how “domestic transfer pricing legislation should be applied to arrangements the terms of which were agreed before 1 July 2010,” and whether Ireland should introduce transfer pricing rules for small and medium businesses and if so, how.
The document also seeks input from companies and practitioners on the second Anti-Tax Avoidance Directive agreed to by EU member states earlier this year. “This Directive significantly strengthens important anti-avoidance provisions to target hybrid mismatches and bring EU law more closely in line with the BEPS recommendations,” according to the document.
In the update on Ireland’s International tax strategy, Donohoe also said global consensus was needed on how digital companies are taxed. “We do not support moving away from the consensus at OECD level which would result in double tax and significant uncertainty,” he said.
Donohoe also said that Ireland will continue to insist that all tax measures at the EU level require unanimity before they can be agreed, reflecting the fact that tax is a key member state competence.
To contact the reporter responsible for this story: Ali Qassim at firstname.lastname@example.org in London
To contact the editor responsible for this story: Penny Sukhraj at email@example.com
Ireland's Consultation Document on its International Tax Strategy is available at http://www.budget.gov.ie/Budgets/2018/Documents/Update_International_Tax_Strategy_Consultation.pdf.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)