Political Agreement Welcomed On Anti-Tax Avoidance Directive

The Minister for Finance Michael Noonan has welcomed the political agreement on the EU's new Anti-Tax Avoidance Directive, which implements a number of important recommendations from the OECD Base Erosion and Profit Shifting, known as the BEPS process.

Ireland signed up to the BEPS recommendations in October 2015 and has been an early mover in implementing recommendations such as country-by-country reporting.

In negotiating the Directive Minister Noonan sought to ensure that Ireland's sovereignty on tax rates was fully protected and that anti-avoidance measures would not impact on genuine investment in Ireland.

The Anti-Tax Avoidance Directive is being transposed with a timeline that allows business to plan ahead and which should ensure Europe acts consistently with the rest of the world:

• The bulk of the Anti-Tax Avoidance Directive must be transposed by the start of 2019;

• The exit tax must apply from 2020;

• The provisions on interest deductions are deferred until 2024 for countries, like Ireland, that already have strong targeted rules.  There are also strong grandfathering provisions to provide certainty to investors.

The Minister said: "Ireland continues to play an important role in international tax reform. It is important that we meet the best international standards, while at the same time retaining our sovereign taxing rights and our right to compete on a level playing field. Ireland will retain its 12.5% corporate tax rate which is transparent and there for all to see."

(MH)