On February 17, 2025, the Irish Revenue Commissioners issued Revenue eBrief No. 045/25, providing updated guidance on the global minimum tax for multinational enterprise (MNE) groups and large domestic groups in line with the OECD Pillar Two initiative. The updated guidance covers several changes, including adjustments to rules for calculating total deferred tax, particularly regarding the order of utilization for loss deferred tax assets. It also includes amendments related to the allocation of certain taxes to hybrid entities and the exclusion of some deferred tax expenses from specific jurisdictions. Additionally, the guidance introduces simplified calculation rules for qualifying groups with small entities and clarifies that standalone investment undertakings cannot be subject to the domestic top-up tax.
In early November 2024, Ireland’s parliament approved new legislation, integral part of the Finance Bill 2024, that simplifies transfer pricing for baseline marketing and distribution arrangements. In addition, it also updates the global minimum tax rules. The legislation passed the lower house, Dáil Éireann, and was approved by the upper house, Seanad Éireann. Currently, it is pending to the president’s signature. The simplified transfer pricing approach, known as Amount B of Pillar One in the OECD’s global tax agreement, standardizes marketing and distribution arrangements. Updates to minimum tax rules include transitional safe harbors and clarifications on using tax losses, ensuring large corporations pay at least 15% on global income.
The Irish government has introduced new legislation that proposes changes aiming to adopt the global agreement which simplifies how businesses value certain intercompany transactions.
This new measure, called Amount B, is part of a 2021 agreement by the Organization for Economic Cooperation and Development (OECD) to redistribute large multinational companies’ profits to where their customers are located. The details of these changes, known as Pillar One, are still being discussed.
The government anticipates that this bill will be approved by the end of the year. This legislation also updates the OECD’s agreement on a 15% minimum corporate tax rate, referred to as Pillar Two, which Ireland has already implemented.
To learn more about the proposed changes, click here.