The European Commission has signalled out Ireland along with five other member states for their “aggressive tax planning” for multinationals.
It named Cyprus, Hungary, Luxembourg, Malta, the Netherlands, as well as Ireland over "certain features" of their tax regimes.
It is not the first time that the Commission has criticised Ireland over its favourble treatment of foreign-owned firms.
However, the criticism may take on additional significance as the EU prepares to detail ways in which the billions in costs for a Covid-19 economic recovery package will be shared between member states.
The so-called Merkel-Macron agreement earlier this week in which the German and French leaders gave their support to developing some-sort of Covid-19 debt-sharing also pledged they would work toward securing a minimum common tax base across the EU.
The Commission, in an annual statement to the European Parliament and other EU institutions, said that “the fight against aggressive tax planning remains a clear priority, in particular to allow member states to rely on their fair share of tax revenues to implement fiscal support”.
“Certain features of some member states’ tax systems (i.e. Cyprus, Hungary, Ireland, Luxembourg, Malta and the Netherlands), however, are used by companies that engage in aggressive tax planning. In this light, these member states are recommended to curb aggressive tax planning”, the Commission said.
On plans for restarting economies following the Covid-19 lock downs, it said member states should focus on investing in sustainable “green and digital” initiatives.