EU urged to halt corporate tax plan until impact studied

The EU’s plan for the Common Consolidated Corporate Tax Base (CCCTB) should be suspended until a country-by-country analysis of its likely impact is undertaken by the European Commission – according to Fine Gael MEP Brian Hayes.

Mr Hayes said he has written to the EU commissioner for economic and financial affairs, Pierre Moscovici, to urge him to undertake the individual country assessments.

The CCCTB has already been criticised by Finance Minister Michael Noonan.

The EU wants it introduced by the end of 2018, with some derogations.

My Hayes said that it is “very unfortunate” that the Commission has not done a country-by-country assessment of the CCCTB on the likely impact on member states’ corporate tax revenues.

“The key issue that member states will be asking about CCCTB is how much they stand to win or lose in terms of tax collection,” said Mr Hayes. “Yet in the impact assessment of CCCTB carried out by the Commission, there is no mention of how member states will be affected individually.
“This type of policymaking on the hoof is not acceptable.”

The MEP pointed out that Mr Moscovici appeared before the Joint Oireachtas Committee on Finance in January and was unable to say then how the CCCTB would impact Ireland’s tax base.

Mr Hayes said that the European Commission has never divulged “clear and comprehensive statistics” on the potential impact of the consolidated tax proposal.

He added that while Mr Moscovici has claimed the CCCTB would result in a likely loss of about 0.2pc of Irish tax revenue, business lobby group Ibec has estimated the potential loss at about 7.7pc of tax revenue, or almost €4bn.

Mr Hayes said he has asked the Commissioner to clarify the calculations used to arrive at the 0.2pc estimate.

Seven national parliaments have objected to the Commission’s tax proposal, including the Dáil. “If the Commission wants CCCTB to succeed, they need to convince member states like Ireland, Sweden and the Netherlands that this policy is in their interest,” said Mr Hayes.

Last February, Mr Noonan said that the Government is concerned that the CCCTB could mean profits currently taxed in Ireland could in future be apportioned to other EU countries and taxed there.

“That’s a breach of the OECD principles,” he said.
The Commission believes that member states’ budgets have suffered from unfair tax competition practices.