PwC Ireland responds to public consultation on Pillar Two implementation in Ireland

25 July, 2022


This public consultation process follows Ireland signing the October 2021 OECD/G20 Inclusive Framework agreement to reform the international tax rules for multinational entities (MNEs) with revenues in excess of €750m.

Since this agreement was signed, part of the second Pillar of the agreement—Pillar Two GloBE rules—has been formulated into model rules (for global adoption) and an EU draft Directive (for EU member states to adopt).

The Department of Finance invited interested stakeholders to submit their views on the technical incorporation of the GloBE model rules into the Irish corporate tax system.

A photo of two people looking out a window

The consultation

The consultation ran from 26 May to 22 July 2022. It was split into 12 parts and featured 25 questions:

  • General
  • Scope 
  • Charging provisions
  • Computation of GloBE income or loss
  • Computation of adjusted covered taxes
  • Qualified refundable tax credits
  • Computation of effective tax rate (ETR) and top-up tax
  • Qualified domestic top-up tax (QDTUT)
  • Administration—payment and filing
  • Transition rules
  • Subject to tax rule (STTR)
  • Large-scale domestic groups

PwC Ireland’s response

Our response highlights to the Department of Finance the problems, solutions and other considerations relevant to the implementation of Pillar Two in Ireland. Pillar Two will represent a fundamental change to the Irish tax system. Given that Ireland will need to give effect to the rules as set out in the EU draft Directive (once adopted), the opportunities to align Pillar Two with the system are limited to making changes to existing domestic rules and practices.

Our paper therefore outlines the areas of the existing tax code that should be modified and updated to achieve a smooth implementation of Pillar Two, and to ensure that Ireland remains competitive and attractive in a post-Pillar Two world. Our areas of focus include:

  • Complexities associated with Pillar Two
  • Accounting issues
  • R&D tax credit
  • Knowledge Development Box
  • 291A write-downs of intangible assets
  • Interest deductibility
  • Future engagement with the Department of Finance and Revenue

The two key actions to take now

1. Familiarise yourself with the issues

Read through the full position paper, available below, or the executive summary on pages one to five.

2. Identify any other areas of concern

Consider how your business will be impacted by the implementation of Pillar Two and whether there are other areas of concern that should be brought to the attention of lawmakers.

We are here to help you

PwC has engaged with decision-makers throughout the development of the rules, both at OECD/EU level and in Ireland. Our experience of applying the rules to real-life scenarios, identifying the impacts and issues, and engaging with policymakers on these issues means that we offer unparalleled expertise regarding the ongoing development and application of Pillar Two. Contact us today to discuss any concerns you might have regarding the proposed rule changes. We are ready to help.


Contact us

Paraic Burke

Partner, PwC Ireland (Republic of)

Tel: +353 (87) 6797774

Peter Reilly

Partner, PwC Ireland (Republic of)

Chloe Fox

Senior Manager, PwC Ireland (Republic of)

Tel: +353 (0)87 721 1577

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