Contributing Firms:
2024 has been a year of major changes on the international, European and Irish tax fronts with the coming into force of the OECD’s BEPS regime the overarching theme for Ireland’s tax regime offering. The new international framework could also be regarded as a catalyst for one of the widely welcomed changes in Ireland’s corporate taxation regime that was confirmed in 2024 - the introduction of a participation exemption for foreign dividends.
In this special edition roundtable we review the major tax topics of 2024 through the prism of The Irish Tax Monitor with implementation of BEPS Pillar Two rule dominating the international agenda while on the Irish front the establishment of a participation exemption for foreign dividends was the standout area for discussion. We also look at the changes and discussion in the areas of investment funds, aircraft leasing and the EU’s tax agenda across 2024.
The BEPS global minimum tax rules (BEPS Pillar Two rules) were introduced into Irish law from 1st February 2024 and this once in a generation revamp of global corporate taxation rules, as described by Maples Group’s Andrew Quinn, was the culmination of process that at times seemed like it might not succeed.
On the domestic front the major development from a corporate tax point of view is the introduction of a participation exemption for foreign dividends.
The latest EU tax initiatives also featured during the year and while the Unshell Directive seems to have fallen out of favour other proposals are now on the horizon – FASTER, ViDA and HOT.
Updates to the taxation of aircraft leasing activity also featured with number of changes to the corporation tax treatment of leases which are relevant to leasing companies as well as lessees.
On the funds sector a number of enhancements to tax treatment of particular vehicles and products were suggested in 2024. BDO’s Angela Fleming wrote on Ireland’s updated ILP regime which, she says would benefit from a number of tax changes. She writes, ‘The definition of “collective investment undertaking” for Dividend Withholding Tax (DWT) purposes should be extended to include ILPs so that dividends can be paid by Irish companies to ILPs free of DWT. Furthermore, the introduction of a participation exemption is critical for the structures typically used by ILPs.
The most significant determinations of the Tax Appeals Commission (TAC) also featured throughout the year including TAC’s first ever determination on the complex area of transfer pricing. The case involved a multinational granting share options to employees of an Irish subsidiary and transfer pricing implications of these transactions.
BDO’s Lee Kavanagh comments on the key taxation aspects aimed at encouraging retail investment in investment funds contained in the Irish Government’s ‘Funds Sector 2030’ report, as a complement to the encouragement of international financial services in the funds industry.