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EU Parliament proposal for a common tax would hammer Ireland’s corporate tax revenue – Hayes

Brian Hayes MEP reacted to the adoption today (Thursday) of a European Parliament proposal to establish a Common Consolidated Corporate Tax Base (CCCTB) in Europe.

“Today a large majority of the European Parliament voted in favour of a Common Consolidated Corporate Tax Base, despite the fact that corporate tax policy is clearly a Member State competence.

“The CCCTB is effectively the EU’s attempt to harmonise corporation tax rates through the back door, creating a common system for taxing large companies across Europe, and sharing out the corporate tax revenues between Member States.

“But in all this, it is the large Member States have the most to gain and the small Member States, particularly Ireland, that have most to lose. It is in Ireland where multinationals devote their investment in research, development and innovation and where the profit is generated. And it is in Ireland where that profit is taxed. The CCCTB proposes that this taxable profit is siphoned off to other countries where maybe some of the sales take place or where advertising is done. The countries with bigger populations will clearly be the winners here.

“We haven’t had a proper impact assessment on a country-by-country basis of CCCTB. How can I vote in favour of this proposal if we can’t quantify the real impact it will have on Irish tax revenues? IBEC and others have suggested that CCCTB, if implemented, could reduce Ireland’s corporate tax revenue by more than 50%. It would be madness to allow half our corporate tax revenues to be shifted to larger Member States.

“This CCCTB agenda has conveniently been associated with the whole debate surrounding tax evasion and tax avoidance, which rightly must be tackled. This is the great EU corporate tax lie. It is disingenuous to suggest that CCCTB will do anything to curb tax avoidance; many tax experts have even said that CCCTB could open Europe up to more tax loopholes and create more tax mismatches with non-EU countries.

“At the end of the day, the CCCTB file is for a decision by the European Council, subject to unanimity voting rules. What the Commission and Parliament need to realise is that in the European Council, there are still various Member States who are against this proposal; this cannot be pushed through without getting consensus from all Member States.

“While Member States should continue to discuss and negotiate this proposal, Ireland should never put itself in a position to permit a one-sided overhaul of corporate tax policy in the EU. We have a veto here and we should not be afraid to use it.

“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.”

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