Ireland still opposed to corporate tax base consolidation, says Kenny
State prepared to engage constructively with European Commission, says Taoiseach, reports the Irish Times.
Ireland remains opposed to the idea of a common consolidated corporate tax base (CCCTB), Taoiseach Enda Kenny said yesterday, though it is prepared to engage constructively with the European Commission on any new proposal unveiled.
The Taoiseach was responding to questions about the latest clampdown by the commission on corporate tax avoidance. On Wednesday, European economics commissioner Pierre Moscovici announced that member states will be obliged to provide details of tax deals to multinational companies on a quarterly basis from January 1st. In addition, the commission is to move forward with a proposal on the contentious CCCTB proposal – which seeks to harmonise EU tax bases – as early as June, as it seeks to tackle multinational tax avoidance.
Speaking on his way into a two-day leaders’ summit in Brussels, the Taoiseach said Ireland opposed the commission’s proposal as it stands.
“Ireland has always objected to the proposal that was on the table in respect of CCCTB as being unworkable and not a feasible proposition at all,” he said.
“If the commission comes forward with a new set of proposals we will engage with that constructively and see what it contains but, in respect of the proposal that was there, we’ve always said from the very beginning that this is not workable and we object to it.”
Proposal stalled
The idea of a common tax base for Europe has been circulating for decades, but has failed to garner sufficient political support from EU member states. A 2011 proposal by the commission has been stalled in the EU legislative system, prompting expectations that the commission will repackage only certain parts of the proposal as it tries to garner political support for a revived CCCTB package.
Speaking during a visit to the United States, Tánaiste and Labour leader Joan Burton said more work was required to identify the effective tax rates imposed by certain countries that are “very significantly” below their state corporate tax rates.
“The critical issue for Europe and the OECD where companies are getting tax breaks [is] the tax breaks should be linked to actual employment, to recovery and to investment,” she said in Washington during his six-day St Patrick’s Day trip to the US.
“That’s the way it has been and is in Ireland and I think it is important that it should continue to be like that.”
There was mixed reaction to Wednesday’s tax package announced by the commission. Tax experts in Ireland played down the potential impact of the tax proposals on Ireland.
“I don’t believe Ireland has anything to fear from this proposal given the nature of our tax regime and Ireland has been to the forefront in trying to increase tax transparency generally,” said Feargal O’Rourke of PwC Ireland.
Senior figures in the European Parliament welcomed the commission’s proposal as a “first step” in the fight against tax fraud and evasion.
“Our aim is to prevent further cases, such as LuxLeaks, which remain morally unacceptable but legally permitted,” said Gianni Pitella, head of the centre-left socialists and democrats group in the parliament.
While taxation is not on the agenda at the summit, the focus of today’s discussion will turn to economic governance and financial matters as leaders discuss states’ implementation of structural reforms. The issue is particularly contentious given France’s repeated failure to meet EU budgetary targets.
