Tax Update

OECD Tax Report: Pillar 2 Implementation Update

On 16 April, the OECD published its OECD Secretary-General Tax Report to the G20 Finance Ministers and Central Bank Governors (the “Report”). While the Report provides a useful update on a number of workstreams, the statements on Pillar Two, the future of Pillar One, the tax certainty agenda and global mobility were particularly interesting.

Pillar Two

In addition to summarising the recently agreed side-by-side package, the Report gives an overview of three categories of planned work on Pillar Two. First, a formal peer review to determine whether jurisdictions have implemented qualified Pillar Two regimes is expected to begin in the second half of 2026. Second, the GloBE Information Return is being revised to implement the side-by-side package. That process will be welcomed by US headquartered groups who are expecting to file more limited Pillar Two returns than other in-scope groups. Third, work is continuing on Administrative Guidance on a number of topics:

• Guidance to develop a routine profits safe harbour and a de minimis profits safe harbour is already in train;
• Simplifications will be introduced for investment entities and minority owned constituent entities;
• More work will be undertaken on integrity measures, this time focussed on the simplified ETR safe harbour along with conditional taxes and related benefits; and
• Industry-specific issues including real estate investment vehicles, the substance-based income exclusion for mobile assets and hyper-inflationary currencies.

The future of Pillar One

The Report notes that there is a strong interest in resuming discussions on tax challenges arising from the digitalisation of the economy – the topic formerly known as ‘Amount A’. Based on public comments made by US officials involved in the discussions, it is clear that the Amount A concept will not be progressed. Instead, there seems to be appetite to examine how existing international tax principles (including source, permanent establishment and transfer pricing) apply to the digitalised economy and whether the outcomes are unsatisfactory. That analysis and discussion will form the basis for a discussion on addressing any challenges that arise.

Tax certainty

On tax certainty (which includes the OECD’s work on mutual agreement procedures and advance pricing agreements), the Report notes that they are working with business and academia and on simplification and dispute prevention. One specific project mentioned is the development of a process to extend advance certainty beyond transfer pricing (ie, to offer an advance pricing agreement like process for non-transfer pricing international tax questions).

Global mobility

The Report notes that interest in changing work patterns as a result of digitalisation and globalisation remains high. Updates were made to the Commentary to the OECD Model Tax Convention at the end of last year to address the question of when a home office could give rise to a permanent establishment. The Report outlines the future work that may be undertaken including considering other kinds of permanent establishment cases, transfer pricing and profit attribution, corporate and individual residence, administration and dispute resolution, and issues associated with digital nomads. It is expected that a programme of work will be agreed later in 2026.

Private hearings at TAC - Finance (Tax Appeals and Fiscal Responsibility) Bill

The Summer 2026 Legislation Programme was issued in April 2026 and included an unchanged version of the Finance (Tax Appeals and Fiscal Responsibility) Bill (the “Bill”).

As noted in our previous updates, one of the key changes under the Bill will be to remove a taxpayer’s automatic right to have their tax appeal heard in private. Under the proposal, taxpayers wishing to have their appeal heard in private must make an application to the Tax Appeals Commission (“TAC”) explaining why the case should be heard privately and the TAC will have discretion to accept or reject the request. The change is proposed on foot of advice from the Attorney General following a Supreme Court decision where a blanket prohibition on public hearings of the Workplace Relations Committee was declared unconstitutional.

The Bill has recently been through a pre-legislative scrutiny process where many legislators expressed scepticism at the proposal to make TAC hearings public. Most recently, on 21 April, a related parliamentary question was raised in the Dáil. In responding, the Tánaiste indicated that, following the pre-legislative scrutiny process, the Department of Finance may need to revert to the Office of the Attorney General in order to better understand the basis for moving to public hearings and to ensure that any such proposal incorporates sufficient safeguards for taxpayers. This signals that the question of public hearings at TAC requires further diligence before the Bill can progress to the next legislative stage.