Consultation seeks views on territorial tax regime in Ireland
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Paschal Donohoe
Proposals for Ireland to adopt a territorial tax system, where corporations would only pay tax in Ireland on income and gains earned in Ireland, have gone out to public consultation.
The government’s roadmap for updating corporation tax, which was published in January, included a commitment to consider a territorial regime to replace Ireland’s current worldwide system of taxation.
At present, Ireland fully taxes foreign-sourced dividend income while exempting foreign-sourced capital gains income, according to the US-based Tax Foundation.
Finance minister Paschal Donohoe said: “Today I am fulfilling my commitment to launch a public consultation on a territorial tax regime which was included in the January 2021 Update to Ireland’s Corporation Tax Roadmap.
“The recent historic agreement at OECD on changes to address tax challenges arising from digitalisation makes this an appropriate time to consider the strategic direction of Ireland’s tax policy by considering the merits of moving to a territorial system of taxation.
“I would encourage all interested parties to engage with this opportunity to contribute to Ireland’s tax policy to ensure that it continues to encourage and support job creation and investment.”
The consultation period will run until 7 March 2022.
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