Brian Hayes MEP for Dublin today welcomed new measures proposed by the European Commission to tackle corporate tax avoidance and harmful tax competition in the EU. The Commission this morning announced new legislative measures to introduce automatic exchange of information between Member States on their tax rulings.
“I think the Commission’s new proposals should be welcomed as a response to the Lux Leaks investigation. There is a clear responsibility in the EU to collect appropriate amounts of tax from the corporate sector. This is also a question of fairness where we need to ensure that all corporates are paying their fair share of taxes.
“But the devil is in the detail in relation to the Commission’s new proposals. It depends on the application of law in relation to how the revenue service collects taxes in each Member State. There cannot be a one-size-fits-all approach and we need to recognise the individual nature of each Member State’s tax system.
“The Irish Government has nothing to fear from engaging with the Commission on their new proposals. This has nothing to do with corporate tax rates; it is about being more transparent with tax rulings. Ireland is well-placed on tax transparency, we are committed to the OECD BEPS process, we were one of the first countries to approve the Foreign Account Tax Compliance Act (FATCA) arrangement and we have signed up to the Berlin international tax agreement.
“As far as we are concerned, it is good news that the Commission is pursuing healthy tax competition. But there needs to be a focus on effective corporate tax rates. In some Member States there is a huge difference between the effective rate and the headline rate.
“Commissioner Vestager and Commissioner Moscovici will come before the European Parliament’s Tax Inquiry Committee on 30th March to present the new proposals. I believe that the Commission as a honest broker between Parliament and Member States must have a clear role to ensure that some Member States are not scapegoats in this process.”