Eight countries reject EU tax proposal

NATIONAL parliaments in eight EU countries have come out against the proposal to have a single system for companies based in the union to calculate their tax. One parliament, Portugal, is in favour.

However, the number falls short of the one-third of countries needed to force the European Commissionto withdraw or adjust the draft Common Consolidated Corporate Tax Basis (CCCTB) proposal.

The Dáil committee was one of the eight that examined the proposal and said it did not meet the criteria of subsidiarity — that it could be done better at EU level than locally.

Committee chair Charlie Flanagan said that the complexities in introducing a second parallel tax system for companies and other elements of the proposal appeared to be geared towards the needs of very large companies rather than smaller entities.

The deadline for receiving responses from national parliaments expired yesterday and a spokesperson for the Taxation Commissioner said that all nine opinions would now be examined.

“The commission will examine all of them and reply. The college of commissioners will decide what action should be taken — whether to maintain the proposals as they are or amend them,” she said.

The countries that came out against the CCCTB including Ireland were Britain, the Netherlands, Bulgaria, Sweden, Poland, Malta and Romania.

The controversial proposals are expected to continue to the next stage, however, going to the European Parliament and the council which represents the member states.

The changes would require unanimity to come into force — something nobody expects. However once the process is completed a number of countries could decide to go ahead and adopt the CCCTB among themselves.

Ireland has been the most vociferous against having a consolidated tax base seeing it as an attempt to harmonise tax rates by the back door.

While some reports say Ireland would not lose out very much under the cross-border system, others say that the proposal to collect tax centrally and distribute it on the basis of a third going to the country where the company is headquartered, a third to the manufacturing base and a third based on sales favours states with bigger populations.

Under the current proposals countries would have to charge their full national tax rate and would be unable to apply the concessions they currently, do which in the case of France with an official rate of 33% ends up as an average of just over 8% for companies.

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