Avocado Roundup: Ireland to Boost R&D Tax Credit to Offset Global Minimum Levy
Avocado Roundup is a quick morning review of top tax, legal, and climate news stories. It’s written by humans.
Ireland’s proposed draft budget for 2024 would boost the country’s research and development tax credit from 25% to 30% and double its payment threshold. The move is aimed at keeping the country competitive in attracting employment and investment after it implements the global 15% minimum tax rate under the OECD’s Pillar Two rules, Finance Minister Michael McGrath said in a speech published yesterday.
McGrath said the government’s finance bill, to be introduced next week, will include legislation to implement the 15% minimum effective tax rate for large companies. “This is a once-in-a-generation reform to our corporation tax system, and marks the culmination of a 10-year, global project to reform the taxation of multinational enterprises,” he said.
In Malaysia, France, the US, and other jurisdictions businesses and other observers have expressed concerns that implementation of the global minimum tax could hurt companies’ ability to compete with rivals in lower-tax jurisdictions. (LegalAvocado)
The United Arab Emirates recently said it would delay its implementation of the minimum tax. (LegalAvocado)
McGrath said the Irish budget would also eliminate the 9% value-added tax on e-books to apply the zero rate already applied to printed books. The zero rate would also apply to audio books. The budget would extend by two years a 3,500 euros ($3,709) tax credit available for purchases of electric cars with a sales price up to 50,000 euros, he said. (Irish Independent)
OECD Releases New Multilateral Convention to Implement Amount A of Pillar One
The Organization for Economic Cooperation and Development Wednesday released text of a new multilateral instrument aimed at resolving some key remaining sticking points on its international deal to address tax challenges arising from the digitalization of the world economy. The organization said the new convention updates the two-pillar framework to co-ordinate a reallocation of taxing rights to market jurisdictions, improve tax certainty for business, and remove digital service taxes. The text will be included in the OECD secretary-general’s new tax report to Group of 20 Country finance ministers and central bank governors meeting in Morocco this week, the OECD said. (OECD.org)
Laterals, Moves
Insurance disputes law firm Kennedys hired tax disputes and investigations partner Andy Brown in London. He arrives from Bird & Bird and was earlier at PwC. Arriving with him from Bird & Bird are associates Chris Young and Jennifer Southern, who was earlier at the UK tax authority. (Kennedyslaw.com)