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Planned changes to rules around minimum corporation tax among measures contained in the Finance Bill

By October 20, 2023No Comments

The Finance Bill, which puts the tax changes announced in last week’s Budget into legislation, has been published by the Minister for Finance, Michael McGrath.

It runs to 270 pages and also includes changes to corporation tax rules to implement the so-called Pillar Two of the OECD tax reforms.

Pillar Two refers to one part of an international agreement which will see companies with sales of €750 million and over, pay a new minimum tax rate of 15%.

This will be backed up by an EU Directive which will see the agreement apply across member states.

The new rules will apply from next year. This means that any potential increase in corporation tax receipts won’t materialise until 2026.

Pillar One of the agreement, which would introduce the right of different governments to tax the profits of multinationals according to where they make their sales, has yet to be endorsed by governments around the world.

Earlier this week the US Treasury Secretary, Janet Yellen, said the US wasn’t ready yet to sign up to this part of the international tax deal.

“The Finance (No. 2) Bill 2023 sets out the legislative provisions to bring effect to the tax measures announced in Budget 2024,” Minister McGrath said in a statement.

“It is a substantial piece of draft legislation required to implement the measures announced in Budget 2024 and the new international rules for the taxation of large corporates.”

The Bill also includes the changes to income tax thresholds announced in the Budget as well as other tax changes, including mortgage interest relief, rental income relief for landlords, renters’ tax credit, vacant homes tax, the R&D tax credit, the new bank levy and the Help-to-Buy scheme.

The Bill also contains the extension of the reduced 9% VAT rate for gas and electricity which is to be extended until 31st October, 2024.

Article Source: Planned changes to rules around minimum corporation tax among measures contained in the Finance Bill – RTE

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