25/01/21

IRELAND: Fianna Fáil MEP says vote to class jurisdiction as ‘tax haven’ was a mistake.

As published on independent.ie, Friday 22 January, 2021.

Fianna Fáil MEP Barry Andrews says he backed a European Parliament vote to class Ireland as a tax haven by mistake. Asked why he’d backed the resolution the Dublin MEP told the Irish Independent that he had intended to abstain on the vote and will seek to correct the record of the vote he cast on Thursday.

Irish MEPs were split over ‘tax haven’ accusations levelled by the EU.

Ireland was named as a tax haven in a resolution adopted by the European Parliament on Thursday, which also called on the bloc to introduce minimum “effective" tax rates.

While all five Fine Gael MEPs voted against the resolution, along with Fianna Fáil’s Billy Kelleher, four of Ireland’s EU deputies voted in favour of it.

They include three Independent MEPs and Mr Kelleher’s party colleague, Barry Andrews. Ireland’s three remaining MEPs abstained.

“Tax is a national competence,” Fianna Fáil MEP Billy Kelleher told the Irish Independent. “Any attempt to undermine that position, unless amended by the Irish people in a referendum, will always be opposed by me.”

Sinn Féin MEP Chris MacManus said he abstained from the vote because it was a “political exercise” and not a “genuine test” of Ireland’s tax status. Ireland’s two Green Party deputies also abstained.

However, Mr MacManus said Ireland’s reputation in the EU is being damaged by the government’s tax policies.

“Patience is wearing thin and Ireland’s moral ground is shifting away rapidly,” he said.

The MEPs’ resolution said Ireland was one of the “top-ranked jurisdictions” in a 2019 tax haven index drawn up by campaigners at the Tax Justice Network.

"Ireland is not, and never has been, a tax haven by reference to the internationally-accepted definition that considers rate, secrecy and substance,” a spokesperson for the Department of Finance said.

The European Commission has repeatedly said Ireland’s policies - such as tax allowances on intangible assets like intellectual property (IP) rights - encourage “aggressive tax planning” by multinationals.

Budget 2021 revised some tax allowances for IP rights, and last week the minister for finance, Paschal Donohoe, published a new “roadmap” for corporation tax reform.

This year the Commission intends to push forward with plans to look at national vetoes on tax matters, which it says are styming efforts to agree tax laws at EU level.

A 2016 draft law on calculating company taxes - the common consolidated corporate tax base - has faltered due to opposition from Ireland, the Netherlands, Malta and several other EU countries.

Ireland prefers working on tax matters at international level, with the Organisations for Economic Cooperation and Development, which intends to publish corporate and digital tax recommendations this summer.