As the US drags its heels over the implementation of the global deal struck three years ago to levy a minimum 15 per cent tax on large corporations – the Organisation for Economic Co-operation and Development’s (OECD) so-called Pillar Two tax reforms – efforts to even secure political agreement over the more contentious plans have all but stalled.
An extended OECD deadline for countries around the world to reach consensus on more contentious Pillar One reforms, which would make multinationals pay more tax where they do business, by the end of June, has come and gone.
The uncertainty over Pillar One has prompted the Central Bank to pull the expected negative impact it had previously pencilled into its 2026 tax estimates for the State. The little-notice tweak was contained in the bank’s latest quarterly economic bulletin, published last week.
Meanwhile, the bank’s forecasts for windfall corporate taxes continues to soar, driven by an expected increase in revenues from the effective 15 per cent rate for companies with a global turnover of €750 million under Pillar Two, which took effect in the EU this year.
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The Central Bank has hiked its windfall Irish corporation tax forecasts from this year to 2026 – and now sees the total excessive haul hitting €47.5 billion.
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That’s €14.9 billion ahead of the official Department of Finance forecast, made in April, for a cumulative €32.6 billion for the three years. With Irish corporation tax receipts up 28 per cent for the first nine months of the year compared with the same period in 2023, will the department meet the Central Bank’s projections when it updates its own forecasts next week?
It’s more than the equivalent of the unexpected €14 billion Apple must pay the exchequer stemming from the European Court of Justice (ECJ) ruling two weeks ago that the iPhone maker received billions in illegal tax aid. (The Central Bank hasn’t included the Apple money in its forecasts.)
Both bonanzas are likely to embolden those in Brussels who would seek to push through a union-wide digital services tax targeting Big Tech in the interim, at least, pending wider consensus on Pillar One.
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