OECD Pillar 2 Rules Introduced in Finance Bill 2023


The Finance Bill, published Thursday, outlined significant changes in Ireland's tax system with key developments encompassing Pillar Two, taxation on share options, outbound payments, and the research and development (R&D) tax credit. The new measures, as outlined in the Finance Bill, are poised to reshape the country's taxation landscape.


The most awaited development in the Finance Bill is the legislation to implement OECD Pillar Two Rules. AmCham has made submissions to the Department of Finance in response to the two feedback statements this year to advocate on behalf of members, with AmCham’s most recent submission available here.


The Finance Bill includes measures which will enact changes in relation to the responsibility for tax deductions related to employee share options, whereby employers will have responsibility for these deductions as part of their employer PAYE returns for any capital gain realised from 1 January 2024.


In relation to outbound payments, the Bill introduces measures to prevent double non-taxation of interest, distributions, and royalties, to recipients in jurisdictions listed on the EU's non-cooperative and zero-tax jurisdictions list. It will also restrict certain domestic withholding tax exemptions and will require additional reporting.


Finance Bill 2023 also brings changes to the R&D tax credit regime, building on measures announced in the Budget. AmCham advocated in advance of Budget 2024 for the increase in the R&D tax credit from 25 percent to 30 percent, and AmCham is pleased to see this change enacted within the Finance Bill. In addition to this increase, new provisions include a pre-notification requirement for companies claiming the credit for the first time. Further, companies may now avail of the R&D credit if another company ceases to carry on its trade under certain conditions.


If you wish to engage with AmCham on matters relating to tax, please contact Christina Kelly, Public Affairs and Advocacy Manager, at c.kelly@amcham.ie.

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