Ireland will not be isolated by EU efforts to change the company tax rules, EU Commissioner Phil Hogan said.
The commissioner, who has publicly supported the Brussels decision last August to demand €12bn in back taxes from the multinational Apple, said the fallout from that decision led to many misunderstandings about EU tax plans.
“There is no risk whatever to Ireland’s 12.5pc rate of company tax. Any change in EU rules on taxation requires unanimity and Ireland could veto any such change,” Mr Hogan said.
But the commissioner said that in practice many other member states, including the Czech Republic, Luxembourg and others, would oppose any such change so Ireland would not be left politically isolated on the issue.
Mr Hogan insisted that the Apple verdict turned around whether “aggressive tax planning” was used to such an extent that it constituted state aid. “These matters are currently sub judice and the subject of an EU court appeal which will play out in the coming year or two,” he said.
Mr Hogan also said he believed that US-based multinational companies would still be attracted to Ireland for its access to an EU market of 500 million people, a skilled English-speaking workforce and a similar legal system.
“But tax incentives will remain an important facet of Ireland’s and many other member states’ economic policies,” he said.
Dublin MEP Brian Hayes yesterday also revealed that seven national parliaments in the EU have objected to the European Commission’s proposals for a Common Consolidated Corporate Tax Base (CCCTB). The plan is a relaunch of efforts to have common EU rules to calculate company’s taxable profits.
These seven objections do not trigger the formal “yellow card” procedure which would have stopped the process at this early stage because one third of the 28 member states are required for this.
Mr Hayes said the seven national parliaments, including the Houses of the Oireachtas, sent formal objections to the European Commission stating that the CCCTB proposal does not meet the principles of subsidiarity.
The proposal was objected to by the Irish, Swedish, Danish, Maltese, Luxembourgish and Dutch parliaments. The UK’s House of Commons, one of the biggest advocates of the yellow card procedure, published a critical report but did not formally object.
He said the commission must listen closely to these parliaments’ objections from national parliaments and the Irish Government must still engage with other member states.
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