We’ve heard enough from Europe’s tax begrudgers
In its position paper the institute said the evidence shows our business tax regime is as fair, if not fairer, than the system in place in Germany and France, two of our sternest critics.
Furthermore the body showed the percentage of tax collected by the state from companies was higher than the take in either Germany or France.
French President Nicolas Sarkozy has used public occasions to take a side swipe at our corporation tax while German Chancellor Angela Merkel faces internal political pressure to play tough with Ireland in return for an easing of the terms of the €85 billion bailout.
After the publication of the institute’s position paper, Brian Keegan, Chartered Accountants Ireland director of taxation, said “many of the attacks on the Irish corporation tax system are ill-informed and unfair.”
He noted several EU countries including Austria, France and Germany want the republic’s corporation tax rate raised as a condition of any re-negotiation on the Irish EU-IMF bailout.
By every measure, including how we exchange tax information with other nations, “Ireland’s corporation tax system is in line with international best practice,” he said.
The report is a welcome boost to the Government, which is taking a very strong stand on this issue.
The good news is that we look to have been garnering public support for our stance on corporation tax.
Europe looks to have a short memory on this issue, given that our right to set our own rate was acknowledged by the EU before the re-run on the Lisbon Treaty.
The right to set our own rate was a significant factor in swinging the Irish people behind the yes vote. It seems that Europe, which has been seriously ruffled by the enormity of the banking crash, looks to have lost sight of that deal.
Fortunately some of Europeans have not. Luxembourg’s prime minister Jean-Claude Junker, who is also chair of the euro group of finance ministers, has condemned the attempt to link the negotiation of a lower interest rate on the bailout to increase our corporate tax rate.
He said he was unhappy that some governments “obviously find some pleasure in torturing Ireland in the meetings and outside. I don’t like this way of dealing with serious problems”.
It looks as if this small economy, ravaged though it may be, still has friends left in Brussels and the stance by Mr Juncker must be music to the Government’s ears.
Earlier this week Richard Bruton, in his first public engagement as Minister for Enterprise, Jobs and Innovation, said there is no way we can allow the 12.5% rate to be compromised.
He said we have gone down the road of sharing our sovereignty under the EU-IMF deal in order to get the economy back to normality.
Imposing a higher corporation tax on us made no sense and would be resisted to the bitter end, he said.
His remarks were echoed by Minister for Agriculture, Simon Coveney, who said it would be “economic suicide” to succumb on the business tax rate.
Mr Coveney said this old canard came up regularly when he was in the European Parliament.
That same point was made in the report from the chartered accountancy body this week. The EU’s Code of Conduct Group was founded to deal with concerns about tax competition which could be harmful to a single market. It dealt with tax concerns “similar to those prevailing today” with no adverse findings made against Ireland at the time.
Chartered Accountants Ireland said the group should be prevailed on to shut the begrudgers up once and for all.
