Ireland faces economic uncertainty with OECD reforms

Significance

This framework laid out two pillars of reform. Pillar One would see large companies liable for tax in the end-market jurisdiction where their goods or services are used or consumed. Pillar Two would set a minimum tax rate of 15%.

Impacts

• Ireland will probably support the reforms by October, and in return it may get some concessions over implementation or sectoral coverage.
• Reduced corporate tax revenue may result in tighter fiscal spending, which would play into the hands of the opposition Sinn Fein.
• The corporate tax proposals come at a particularly bad time for the Irish economy, which is already facing the consequences of Brexit.