Dáil Éireann Debate, Wednesday - 25 March 2026
41. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance further to Parliamentary Question No. 409 of 18 March 2026, to outline the projected additional corporation taxes that will be taken in as a direct result of the global minimum effective tax rate (ETR) of 15 percent in 2026; and if he will make a statement on the matter. [22737/26]
Amharc ar fhreagraIreland joined the global consensus in reaching a political agreement at the OECD Inclusive Framework on BEPS in October 2021, to sign up to a two-pillared solution to the tax challenges arising from the digitalisation of the economy.
Pillar Two of this agreement includes a commitment to introduce a 15 per cent global minimum effective tax rate for multinational enterprises with an annual turnover in excess of €750 million, located in in-scope jurisdictions, through the GloBE Rules.
Ireland, together with our fellow EU Member States, implemented Pillar Two by transposing the EU Minimum Tax Directive effective for fiscal years beginning 31 December 2023 and later.
On 5th January 2026 a Side-by-Side Package Agreement on Global Minimum Tax was approved and adopted by the OECD / G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), including Ireland.
The Agreement delivers a solution which preserves the objectives of the Global Minimum Tax while allowing for co-existence with qualifying regimes that demonstrate a robust system of taxation in line with the Side-by-Side Safe Harbour criteria. The US were added to the central record of qualifying regimes as part of this package, having passed rigorous assessment by the Inclusive Framework.
The OECD Agreement (i.e. both Pillars One and Two) would come at a cost to Ireland in terms of reduced tax receipts.
Given that Pillar One remains at an impasse for now and agreement has only recently been reached on the Side-by-Side solution to Pillar Two, with domestic implementation work ongoing, arriving at an accurate estimate of the fiscal impact remains challenging.
As part of Budget 2026, the Department of Finance published an updated Exchequer impact for Pillar Two of the OECD Agreement.
From 2026 onwards, all else equal, it is estimated that Ireland will collect approximately €3 billion in additional annual corporate tax receipts from the implementation of the 15 per cent minimum effective tax rate under Pillar Two of the OECD agreement.
Agreement on the Side-by-Side package earlier this year is not expected to significantly impact these initial estimates on the basis that it protects the top-up tax due for collection through Qualified Domestic Minimum Top-up Taxes. It remains important to note that these are high level estimates and do not take into account potential behavioural or other responses that may arise from the implementation of minimum tax rules globally. Officials will continue to review and update these estimates as further information becomes available.
