EU commission calls for new Irish commitment to 15% corporate tax rate

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The chairman of an EU tax sub-committee is seeking further assurances that Ireland is still committed to a minimum corporate tax rate of 15%, amid continued concerns from EU institutions over Ireland’s ability to regulate several Dublin-headquartered tech giants.

utch MEP Paul Tang and five other MEPs from the European Parliament Sub-Committee are due in Dublin on Monday for a two-day visit.

They will meet Finance Minister Paschal Donohoe, a representative from Revenue and groups such as the Irish Congress of Trades Unions and the Irish Confederation of Business and Employers.

Mr Tang, an economist, has previously said his aim as chairman of the European Parliament’s FISC committee is to spark debates in EU capitals on fairer tax systems.

“Decision-making (in tax matters) is always done behind closed doors. And what we’re trying to do with the FISC committee is to break that down, to make the debate public,” he told Forbes in a March 2021 interview.

“If we can bring some of the work of the FISC committee to capitals, I think that’s already enriching the debate, but also raising public awareness and public pressure for change.”

Ahead of the visit, Mr Tang told the PA news agency that one of his goals was “to reach decisions on the minimum corporate tax rate”.

In 2021, more than 130 jurisdictions, including all EU member states and members of the Organization for Economic Co-operation and Development (OECD), have agreed to set a minimum worldwide corporate tax rate of 15 %.

Although Hungary indicated in June that it no longer supported the proposal, Mr Tang said there was “a clear initiative” for EU member states to override Hungary’s veto to pursue the proposal. ‘OK.

“I would be happy to hear that Ireland is still part of the initiative, it would be good for the OECD deal, but it would also be a good response to Hungary if EU member states s unite and decide with 26 (out of 27 countries) to apply the minimum corporate tax rate.

“I know it’s a sensitive subject in Ireland,” he added.

In recent months, Mr Donohoe has repeatedly warned of the risk to Ireland’s economy of being overly reliant on tax revenue from tech giants – even for one-off measures to help people to deal with the cost of living crisis.

When asked if he was unsure of Ireland’s position on corporation tax, Mr Tang replied: “I’m not sure, but I would be happy to hear that Irish politicians and decision-makers confirm their position. It would be good.”

Also discussed will be the European Commission’s proposals for an EU-wide withholding tax and to ask Ireland to commit to an EU directive tackling shell companies, often used to avoid pay taxes on income accrued elsewhere or to launder money.

“What is Ireland doing, and is Ireland doing enough?” said the Dutch MEP, adding that his own country and Luxembourg would also be “in the spotlight” on whether they are doing enough to promote a fairer tax system.

Mr Tang said different political groups are united in the idea that tax evasion and tax evasion must be “fought very hard” across the EU.

“There is an initiative at European level called the ‘Unshell Directive’, which targets shell companies. Is Ireland prepared to support this?

“Because these are all ways to stop tax avoidance and tax evasion.

“To fight tax evasion, you cannot rely solely on the OECD agreement. This requires new initiatives at European level,” Tang added.

“I think the general idea would remain that tax evasion takes place to the detriment of European partners. They advance the same arguments in my country: it is to the detriment of German and French taxpayers.

“I want Ireland – but also Luxembourg and the Netherlands – to have this pro-European mindset” when it comes to tax avoidance, he added.

In addition to the FISC delegation, the European Parliament’s LIBE committee, responsible for data protection, is also due to visit Dublin next week.

The two committees which visited Dublin in the same week suggest concerns remain among EU institutions about Ireland’s ability to handle the tech giants it hosts.

Facebook, Apple and Google have their European headquarters based in Dublin.

“Overseeing big tech takes resources, but are enough resources being spent on it, and is it good enough to help?” said Mr. Tang.

Incidents of “conflict” between decisions made by the Irish Data Protection Commissioner (DPC) and other data protection authorities across Europe are also “worrying”, he added.

The DPC has come under fire for proposing a €50 million fine to WhatsApp for violating privacy laws, but the fine was increased to €225 million after consulting its European partners.

Data Protection Commissioner Helen Dixon recently called the long-running criticism ‘becoming old news’ and defended the varied rulings as a difference in interpretation of how fines are calculated.

Mr Tang said: “I understand that Ireland has benefited a lot from foreign direct investment, especially big tech.

“But that’s not a way to lure them into Ireland by giving them opportunities for tax avoidance or lacking data protection standards.”

As a Western country that mainly speaks English, it is a “gateway to Europe”, Mr Tang added that “I still think Ireland will do very well” without the investments made by multinational technology companies.

“Ireland is one of the wealthiest members of the European Union. The times have changed. I think Ireland have every reason to be confident.

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