The president of the Irish Tax Institute will predict on Friday evening that foreign investment in Ireland will not dry up as a result of new global minimum tax rules for large multinational businesses.
Tom Reynolds will also warn at the Institute’s annual dinner that this outcome will depend on the Government making Ireland more competitive as a location for investment by delivering on reforms that would simplify the business tax code.
“The cost and ease of doing business were as important as our 12.5 per cent rate in the investment decisions of the companies I have worked in,” he will say.
Mr Reynolds has worked in senior global tax roles in multinational entities for almost 30 years and has recently taken up the role of global head of tax for the Schneider Electric-owned software company Aveva.
Implementing the Pillar Two rules will be complex and expensive, Mr Reynolds will say, but a properly resourced simplification project with a clear timetable for the delivery of reforms will ease compliance and give certainty to both domestic and multinational businesses.
“The competition for foreign investment is intensifying and big countries like France and Germany are joining the fray. We cannot afford to lose ground.”
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Mr Reynolds, who has also worked in senior tax roles for multinational entities including Kerry Group and Kellogg’s, will also call on Revenue to be pragmatic in its approach to compliance with the new Pillar Two rules for large multinational businesses.
“Those of us who work in the tax functions of large multinationals are now getting our heads around how we comply with what is in effect a new and untested taxing system that sits alongside our domestic corporation tax code. Suffice it to say that we need Revenue to be supportive and pragmatic in the bedding in period ahead.”
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The president will also warn of the inevitability of tax disputes and Revenue audits because of divergences in the interpretation and implementation of the rules internationally.
“We need workable resolution mechanisms to deal with these disputes. Otherwise, businesses could end up in lengthy tax legal processes, potentially with multiple tax authorities. That would add cost and uncertainty to an already difficult global trading environment.”
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Mr Reynolds will also say that the State’s reputation as a stable, open, and tolerant democracy has been a huge asset in attracting foreign investment.
“But that reputation could easily be undone. In the current testing times, we must all play our part in protecting it. We all have a role.”
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