Brian Hayes MEP

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7 national parliaments object to CCCTB proposal – Hayes

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7 national parliaments object to CCCTB proposal – Hayes

Threshold not reached for a formal yellow card to CCCTB

Brian Hayes MEP today (Monday) confirmed that seven national parliaments in the EU have objected to the European Commission’s CCCTB (Common Consolidated Corporate Tax Base) proposal but this does not trigger the formal yellow card procedure.

European-Commission1

“These seven national parliaments, including the Houses of the Oireachtas, have issued formal objections to the European Commission clearly stating that the CCCTB proposal does not meet the principles of subsidiarity.

“While this is a significant number of objections, it is not enough to trigger the formal yellow card procedure for EU legislation. For this to happen, at least 33% of national parliaments must object to a proposal.

“The yellow card procedure came about through the Lisbon Treaty which gave national parliaments the power to review legislation and signal objections if they consider measures to be outside the EU’s mandate. Until now, the yellow card procedure has only been deployed three times. Yet it is rare that as much as seven national parliaments would object to EU legislation.

“The CCCTB legislation was proposed in October last year. National Parliaments were given the deadline of 3rd January 2017 to respond to the new rules which will have a major impact on corporate tax policy in the EU. The proposal was objected to by the Irish, Swedish, Danish, Maltese, Luxembourgish and two chambers of the Dutch Parliament. The UK’s House of Commons, one of the biggest advocates of the yellow card procedure, did publish a report criticising the proposal but did not issue a formal objection.

“The Commission must listen closely to these objections from national parliaments. The fact that these national parliaments have issued a yellow card to the legislation means that their governments have a stronger mandate from their elected representatives going into negotiations.

“While I believe that the consolidation aspect of the CCCTB proposal is a bridge too far, the Irish government must still engage with other Member States and the Commission, particularly on a common corporate tax base (CCTB – without consolidation). Consolidation of the tax base, however, effectively represents wide-scale tax harmonisation through the back door. It cuts across how Member States set their tax corporate rates and policy and is a cumbersome way of addressing cross-border tax losses.

“The Commission failed on one attempt to get CCCTB over the line. There is a serious onus on the Commission now to understand the concerns that various Member States have on this file.”

 

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