On July 1, 2021 the OECD announced that 130 of the Inclusive Framework’s (IF) 139 members, together representing more than 90% of global GDP, joined a Statement establishing a new framework for international tax reform (the joined Statement on a Two-Pillar Solution to Address the Tax Challenges Arising From the Digitalisation of the Economy).


9 of the 139 IF members have not yet joined the Statement at this time. 3 of the IF members that have not yet joined the Statement (Estonia, Hungary and Ireland) are EU-Member States. It should be noted that a fourth EU-Member State that has not joined the Statement is Cyprus, but Cyprus is not a member of the IF.


The two-pillar package aims to ensure that large Multinational Enterprises (MNEs) pay tax where they operate and earn profits, while adding much-needed certainty and stability to the international tax system.


Pillar One would re-allocate some taxing rights over MNEs from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there. With a minimum rate of at least 15% Pillar Two seeks to put a floor on competition over corporate income tax.


The remaining elements of the framework, including the implementation plan, will be finalised in October.


With respect to Ireland not yet joining the Statement, the Irish Ministry of Finance has issued a press release stating that Ireland broadly supports OECD Inclusive Framework Agreement on key aspects of new international tax rules with reservation.


In the press release issued by the Irish Ministry of Finance a.o. the following is stated:

“Ireland has fully supported the Pillar One proposals. This is in recognition that the way in which business is conducted has evolved and that the taxation system must evolve with it. There will be a cost to Ireland for this in terms of reduced corporation tax receipts, but overall Pillar One will bring stability and certainty to the international tax framework and will help underpin economic growth from which all can benefit.


Ireland expressed our broad support for the agreement on Pillar Two but noting our reservation about the proposal for a global minimum effective tax rate of ‘at least 15%’. As a result of this reservation, Ireland is not in a position to join the consensus.


There is much to finalise before a comprehensive agreement is reached in October. Ireland will constructively engage in these further discussions and technical work over the coming months.”


The full text of the joint Statement as released by the OECD on July 1, 2021 can be found here.


A list of the 130 IF members that have joined the statement as per July 1, 2021 can be found here.



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