Public Consultation on a Territorial System of Taxation

In light of the current international tax climate, and recent changes to the Irish tax system, AmCham is of the view that now is the correct time to initiate the move to a territorial system of taxation and that the transition should be effective from 1 January 2023.

A territorial regime would bring many benefits to taxpayers: certainty of treatment and a reduction in the compliance burden. The current credit system, that operates under our worldwide taxation system, gives rise to considerable difficulties not just for US multinational enterprises (MNEs) operating out of Ireland but also for Irish headquartered groups. The consequential record-keeping and computational requirements are very burdensome, with little corresponding incremental tax yield for the Exchequer. In this regard, the Department’s consultation document states that “in practice, this often results in limited amounts of incremental tax becoming payable in Ireland on foreign earnings.”

Read full submission here