Ireland broadly supports OECD agreement with reservation rate

On 1 July 2021, the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework agreed on a two-pillar solution to address the tax challenges arising from digitalization of the economy.

Details of the key components of the agreement can be accessed at Statement on a Two-Pillar Solution to Address the Tax Challenges Arising From the Digitalisation of the Economy – 1 July 2021 ( (pdf).

The OECD Inclusive Framework will continue to work on detailed aspects of the design elements of the solution with a view to reaching agreement by October.

Ireland issued a press release broadly supporting the agreement with reservation about the proposal for a global minimum effective tax rate of ”at least 15%.” As a result of this reservation, Ireland is not in a position to join the consensus at this point.

Ireland will continue to constructively engage in the OECD process and related technical discussions over the coming months.

Ireland is expected to launch a public consultation on the OECD negotiations. EY will actively participate in that consultation.

Statement issued by Ireland’s Minister for Finance

The Irish Minister for Finance, Minister Paschal Donohoe issued the following statement on 1 July.

Ireland broadly supports OECD Inclusive Framework Agreement on key aspects of new international tax rules with reservation – Donohoe

The OECD Inclusive Framework has today (Thursday) reached agreement but not unanimous consensus on the key aspects of the two-pillar solution to address tax challenges arising from the digitalisation of the economy. 

Pillar One proposes a re-allocation of a proportion of tax to the market jurisdiction, while Pillar Two seeks to apply a global minimum effective tax rate. Work will now continue with a view to finalising a comprehensive agreement in October.

Ireland has fully supported the Pillar One proposals. This is in recognition that the way in which business is conducted has evolved and that the taxation system must evolve with it. There will be a cost to Ireland for this in terms of reduced corporation tax receipts, but overall Pillar One will bring stability and certainty to the international tax framework and will help underpin economic growth from which all can benefit.

Ireland expressed our broad support for the agreement on Pillar Two but noting our reservation about the proposal for a global minimum effective tax rate of ‘at least 15%’. As a result of this reservation, Ireland is not in a position to join the consensus.

There is much to finalise before a comprehensive agreement is reached in October. Ireland will constructively engage in these further discussions and technical work over the coming months.

Minister Donohoe has said: ‘I have consistently spoken of my desire for a comprehensive, sustainable and equitable agreement on the international tax rules at the OECD that meet the needs of all countries, large and small, developed and developing. I was not in a position to join the consensus on the agreement and specifically a global minimum effective tax rate of ‘at least 15%’ today. I have expressed Ireland’s reservation, but remain committed to the process and aim to find an outcome that Ireland can yet support. Ireland will continue to play our part in reaching a comprehensive and, indeed, historic agreement’.

Next Steps

There is much technical work do be carried out by the OECD Inclusive Framework to facilitate a final decision by the October timeline.

EY looks forward to ongoing engagement with stakeholders as the process evolves including participation in the upcoming public consultation.


For additional information with respect to this Alert, please contact the following:

Ernst & Young (Ireland), Dublin
  • Joe Bollard
  • Dan McSwiney
  • Kevin McLoughlin
  • Rory MacIver
  • Dave Barry
  • Aoife Murray
Ernst & Young (Ireland), Financial Services, Dublin
  • Aidan Walsh
  • Petrina Smyth
Ernst & Young (Ireland), Cork
  • Frank O’Neill
  • Seamus Downey
  • Aileen Daly
Ernst & Young (Ireland), Limerick
  • Billy McMahon
  • Leanne Storan
Ernst & Young (Ireland), Waterford
  • Paul Fleming
Ernst & Young (Ireland), Galway
  • Paraic Waters
Ernst & Young LLP (United States), Irish Tax Desk, New York
  • Emer Gallagher
  • Michéal Bruen
Ernst & Young LLP (United States), Irish Tax Desk, San Jose
  • Karl Doyle
Ernst & Young LLP (United States), FSO Irish Tax Desk, New York
  • Aine O’Connor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.