22/09/17

Varadkar reveals plans for pension reform as he pledges to remain firm on proposed EU tax shake-up

Taoiseach Leo Varadkar has said the Government will resist any shake-up of corporate tax rules at European level that could impact Ireland, reports Independent.ie.

It comes as the European Commission reportedly wants to proceed with an overhaul of taxes on digital firms even if the rest of the rich world won't follow suit.

The Government has consistently rejected such moves. Despite that - and rules that EU tax changes can't go ahead without the support of all member states - the Commission is pushing to tap more revenues from online multinationals such as Amazon and Facebook.

But at a dinner hosted by business lobby group Ibec, Mr Varadkar said Ireland would stand firm against any moves by Brussels to interfere in tax policy.

“We are determined to protect our national tax policy and will oppose any moves on corporate tax consolidation or turnover taxes on digital companies,” Mr Varadkar said.

“We also remain committed to the OECD-led process on tax transparency.  Ireland is not and will never be a tax haven.”

A draft report from the European Commission, which could be adopted as policy, said older bricks-and-mortar multinationals pay twice the tax in the EU that their digital competitors do.

Here, Finance Minister Paschal Donohoe repeated on Wednesday that taxing the digital sector should be examined at Organisation for Economic Cooperation and Development (OECD), not EU level.

The EU’s preferred option would be for an agreement on this at OECD level.

But “the EU must prepare to act in the absence of adequate global progress,” Commission Vice President Valdis Dombrovskis told a news conference in Brussels, saying that a legislative proposal may come next spring.

Such a move is likely to upset Washington and other rich nations that are home to many global tech giants.

It comes just a week after European Commission President Jean-Claude Juncker said he wanted the Common Consolidated Corporate Tax Base (CCCTB) plan pushed through without requiring the agreement of all member states and wanted it implemented via qualified majority voting rather than unanimous agreement.

Meanwhile, he also revealed details of his pension strategy.

"This issue has been long-fingered for too long, and now that the economy is recovering strongly we must act decisively, and we will publish a five year roadmap for pension reform before the end of the year," he said.

"I anticipate the first payments being made into those new individually held funds by 2021."

Mr Varadkar also said the Government must balance necessary public capital investment with prudent fiscal policy.

He said that where there is scope in the Budget, it will be used to reward work and enterprise, and will benefit those on middle incomes and those “who pay the highest rates of tax far too soon”

Mr Varadkar also said he plans to "reward work and enterprise" in the budget.

"We also want to develop a new social contract, one that’s based on the contributory principle: the idea that everyone who can afford to should make a contribution, in the knowledge that they will benefit when they need it.   To do that we want to expand and improve social insurance related benefits in the years ahead," he said.

Legislation is also being prioritised to ban zero-hour contracts he told the audience.