Pillar 2 and the Impact on Corporate Treasury in Ireland
Since early October 2021, when the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) initially proposed their implementation plan around Pillar 1 and Pillar 2, the EU Member States have been through a rollercoaster journey in an attempt to reach unanimous agreement.
Finally, in December 2022, the EU Council announced progress on the implementation of Pillar 2 with Zbyněk Stanjura, (the Czech presidency of the EU Council) stating that;
"I am very pleased to announce that we agreed to adopt the directive on the Pillar 2 proposal today. Our message is clear: The largest groups of corporations, multinational or domestic, will need to pay a corporate tax that cannot be lower than 15%, globally."
The end result was the adoption of a final EU Council Directive on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the European Union, which must be transposed into local country legislation no later than 31 December 2023. This is otherwise known as the EU Directive on Pillar 2, which undoubtedly will have a major impact on treasury centres in Ireland.
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