The Revenue Commissioners have published their first detailed guidance on the BEPS Pillar Two rules, following the introduction of the EU Minimum Taxation Directive (Pillar Two) in Finance (No. 2) Act 2023. Please comment on the guidance.
Yvonne Diamond, Senior Tax Manager, Financial Services Tax: On 15 May 2014, Revenue published its long-awaited detailed guidance on the implementation of “Pillar Two” in Part 04a-01-02 of the Tax and Duty Manual.
Section 94 of Finance (No.2) Act 2023, transposes into Irish law, the EU Minimum Tax Directive (Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union). Part 4A of the Taxes Consolidation Act (TCA) 1997, implements the Pillar Two minimum effective tax rate for large groups and companies in Ireland.
The guidance is set out in four easy to follow sections:
1. An overview of the rules
2. A description of the correlation table
3. A short note on further guidance
4. The detailed correlation table contained in an appendix.
The overview contains a concise summary of the rules which, as well as setting out the background and content of the rules also describes the main charging provisions, exceptions and operative dates of the rules.
The correlation table included in Appendix 1 of the guidance (which accounts for 110 of the 116 pages of the manual) contains detailed cross references of the legislation from Part 4A TCA 1997 with:
• The relevant article of the EU Minimum Tax Directive
• The relevant article of the OECD Model Rules
• OECD Commentary, where relevant
• OECD Administrative Guidance, where relevant.
Revenue also advise within the document of the ongoing consultation with the Tax Administration Liaison Committee (TALC) BEPS sub-committee, and that the manual is expected to be expanded as that process continues. The further development of the guidance is eagerly awaited as large businesses are keen to understand their new obligations under Pillar Two.
Content adapted from Finance Dublin’s Irish Tax Monitor.