DUBLIN: The European Commission’s plans to introduce a Common Consolidated Corporate Tax Base (CCCTB) across the European Union could destroy Ireland’s tax take, UCC economist Seamus Coffey has warned. Speaking before the Oireachtas Finance Committee on the proposals, Coffey said:
“It is not unduly pessimistic that Ireland could lose up to 50% of our current corporation tax base if the CCCTB is to be introduced.”
The Government is opposed to the proposals, which would essentially see corporation taxes applied at local rates in the countries where companies sell their goods and services as distinct to where their regional headquarters are located.
The move would benefit large member states such as France but, as Coffey warned the Oireachtas Finance Committee yesterday, could have a huge impact on Irish revenues which are likely to rise to over €7bn in the current year.
Coffey also noted that, as well as seeing Irish-based companies forced to pay some of the tax currently paid here elsewhere, it could change corporate behaviour, including where they set up.
The proposals might also see Irish firms pay less tax as they avail of new loopholes including writing off entertainment costs.
The Irish Tax Institute said the CCCBT would mean a loss of Irish sovereignty, writing in its submission to the committee:
“Countries need the flexibility to adapt their tax policy if problems arise or individual circumstances change. One of Ireland’s unique strengths is that we can adapt quickly to change when the need arises. This has served us well and is not something to surrender lightly.”
According to the Irish Independent, the EU economic commissioner Pierre Moscovici commented last month:
“We are in a new world where people want transparency and want the multinationals to pay their fair share of tax where they take profits. We are really, I think, not trying to act against national tax sovereignty but to create a European sovereignty in this matter.”
His comments came as Brussels also announced plans to develop a Eurozone finance ministry and ordered a collective fiscal stimulus of approximately €50bn for members.
