The Department of Finance has a proposal regarding Ireland’s Corporation Tax Roadmap (“The Roadmap”) setting out the next steps regarding changes required at EU level under the Anti-Tax Avoidance Directives (the “ATAD”) and the OECD’s Base Erosion and Profit Shifting project.

The Roadmap is available here for review:

Key Changes –

1. General anti-abuse rules (GAAR)

  • The Irish Government are of the view that there is no change required under Irish law

2. Interest limitation rules

  • The effective date will be 1 January 2024 although it might be earlier, but Ireland has asserted, and remains of the view, that it is entitled to a derogation from the introduction of the ATAD interest limitation rule until the beginning of 2024

3. Anti-hybrid rules

  • Legislation will be introduced in Finance Bill 2019 so that the first tranche of anti-hybrid rules will be effective from 1 January 2020. There will be further legislation after that.

4. Controlled foreign corporation rules (CFC)

  • It is expected that the Finance Bill will include CFC rules to be effective from the 1st January 2019

5. Exit tax

  • Legislation will be introduced so that Irish Law will be compliant with the ATAD Exit rules no later than 1 January 2020, but the Rates have yet to be confirmed

6. Transfer Pricing

The 2017 OECD Transfer Pricing Guidelines will be incorporated into Irish law and will apply from 1 January 2020.  While further consultation and review is expected it is important to note that these will include application to small and medium enterprises

7. Moving to a Territorial Regime

The Roadmap indicates that Tax Law will move to a territorial regime for foreign dividends and branch profits and there will be further consultation and consideration on this proposal during 2019.

8. Multilateral Instrument (MLI)

From1 January 2020 the MLI is expected to update Ireland’s double tax treaties and attention is being given to incorporating anti-avoidance rules into Ireland’s domestic withholding tax exemptions.