17/02/17

Ireland: Finance Minister Michael Noonan hammers EU tax plan for hurting ‘consensus’

Finance Minister Michael Noonan has stepped up the Government’s campaign against Brussels’ plan for a new common corporate tax regime saying the proposal will endanger the international “consensus” on ways to tax multinationals, reports Irish Examiner.

Speaking at a Government-commissioned conference on developing countries, called Corporate Tax: Fairness, Responsibility and Leadership, Mr Noonan said the Commission’s plan for a common consolidated corporate tax base would insist on public reporting of tax on a country basis which countries outside the EU oppose.

He said Ireland had signed up to and supported the initiative called Beps — base erosion and profit sharing — driven by the Organisation for Economic Co-operation and Development (OECD).

The EU plan could stall the implementation of the OECD initiative around the world, Mr Noonan said. Current proposals would reveal where multinationals are paying tax.

“The Commission’s proposal for public country-by-country reporting goes against the Beps consensus that the value of these reports is enabling tax authorities to see what is really happening and carry out more informed audits and assessments.

"Other non-EU countries have suggested any public reporting requirement could result in them no longer sharing the country-by-country reports filed with their tax authorities,” the minister said.

The Commission over two years ago tasked economics and tax commissioner Pierre Moscovici with the job of striking a new common tax regime for allocating the spoils of corporate tax around the EU. Mr Moscovici has repeatedly said the Brussels’ plan would not affect the country’s 12.5% corporate tax rate.

Successive Irish governments have opposed the notion of a European common tax base ever since Brussels proposed an original version of the tax plan over 12 years ago.

Separately, a report by Davy Stockbrokers published yesterday said Ireland will likely be a net winner from Brexit because it will help it build on the success of the country in attracting foreign investment at the expense of Britain which will be outside the single market.

According to the report, changes to the US corporate tax code and tax amnesty by President Donald Trump “will have a limited impact” here, while the Brussels’ new corporate tax plan will be stillborn.

President Trump’s pledge for US import taxes “risk retaliation from the EU and other countries”, while the Commission’s tax plan “would lead to winners and losers among EU countries, [which is] precisely why it will not be adopted”.