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ECON recommendations on CCCTB would destroy Irish corporate tax revenue – Hayes

Brian Hayes MEP said that recommendations for a Common Consolidated Corporate Tax Base (CCCTB) voted on by the European Parliament’s Economic Affairs Committee today (Wednesday) would cause significant damage to Irish corporate tax revenue if adopted by the European Council. The European Parliament does not have a formal role in deciding the final outcome of the CCCTB legislation but it must give its opinion before an agreement is reached by the European Council.

“The ECON Committee report on CCCTB poses yet another threat to Irish corporate tax policy. Although the Parliament’s role in EU tax dossiers is limited, this adds to the growing political pressure to harmonise corporate tax policy in the EU. Let’s be clear – the CCCTB file as it stands would destroy Irish corporate tax revenues. IBEC has estimated that it could erode our corporate tax base by up to 50%. I voted against the ECON Committee recommendations as they go further than the original Commission proposal and would also impose a new digital tax, without any proper impact assessment.

“The ECON recommendations advocate applying the CCCTB to companies with annual turnover of more than €750 million, but after seven years, it would apply to all companies. We cannot allow a situation where CCCTB applies to all Irish companies, big and small. The original intention of the file was to target multinational companies. The proposal to apply a new digital tax to CCCTB is very problematic to Ireland as we  depend heavily on tax revenue from digital companies.

“One serious problem in this whole process is that the Commission has never conducted a comprehensive impact assessment on a country-by-country basis of CCCTB. It is impossible to vote in favour of this proposal if we can’t quantify the real impact it will have on Irish tax revenues. It would be madness to allow half our corporate tax revenues to be shifted to larger Member States. Also, seven national parliaments, including the Dáil, issued objections to CCCTB because of tax sovereignty issues. Their concerns have not been addressed by either the Commission or European Parliament.

“At the end of the day, this file is for a decision by the European Council, subject to unanimity voting rules. Ireland should continue to engage constructively in the negotiations but we should be vigilant in signing up to anything that could have a detrimental effect on our corporate tax revenue.

“The CCCTB proposal would have a minor impact on tackling aggressive tax planning, but would have a severe impact on Member States’ economies. We do have to tackle aggressive tax planning but this is not only a European problem, it is a global problem. The best way to tackle this problem is on an internationally agreed basis through the OECD BEPS process.”

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