Ireland: MEPs to grill Michael Noonan on tax deals

Ireland still offers unfair tax deals to multinationals despite its claims of being fair and open, Alain Lamassoure, the head of the European Parliament’s tax committee has said, reports the Irish Examiner.

His allegation comes as the European Commission announces it wants every member state to agree to adopt the same rules to assess each company’s tax liability, though it will not suggest adopting the same tax rate.

Mr Lamassoure leads a delegation to Dublin today to meet Finance Minister Michael Noonan as part of the parliament’s investigation into special tax deals with big companies following the LuxLeaks revelations.

But while Ireland has abolished the “double Irish” and the stateless tax regime after it came under immense pressure from the US and EU countries, Mr Lamassoure questioned whether anything had really changed.

The former French economy minister and senior member of the European Parliament who heads the committee, said he wanted to see if Ireland had replaced them with other advantages for multinationals.

“I want to see if there are other pieces of legislation to offset the removal of these, to the advantage of the companies and I want to understand what is now the mood in Ireland,” said Mr Lamassoure, who is in the same political group as Fine Gael.

He was also sceptical of the Irish argument that the headline corporate tax rate of 12.5 per cent is not much different to the actual rate paid by the companies, and cannot be compared with the rates of other countries as the basis is different.

“But at 0.5 per cent, it is unacceptable. I am talking about the Apple case or Adobe which made €500m profit in 2012 in Europe and which is located in Dublin and paid just €2m in tax,” he said.

Mr Lamassoure was also doubtful about Ireland’s assertion that it was in favour of tax competition and said tax competition must be based on rules, transparency, and justice that apply to all EU states.

“Today, among the 28 member states, we see there is no transparency and there is injustice and unfairness which is why everyone should be in favour of a common corporate tax base,” he said.

Ireland has said it is in favour of this, which would see companies able to make a single tax return that would cover all countries in which they operate. Mr Lamassoure is also in favour of seeing the profits distributed to countries on the basis of where they were manufactured and sold and where the company was headquartered.

But he believes that small countries like Ireland should not be allowed advantages over bigger countries when trying to attract foreign investment. “They have the advantage of being part of a huge single market — I do not believe we should open up this possibility, it would be a Pandora’s box,” he said.

A delegation of members of the special committee on tax rulings of the European Parliament, that will include some Irish MEPs, will meet Mr Noonan, members of the Dáil finance committee, and representatives of accountancy firms, business associations, non-governmental organsiations and companies.

The European Commission has said it will produce a new draft plan for a common corporate tax base next month. Ireland has participated in discussions about this for the past few years but member states have not been able to agree on it.