Moscovici criticised over common corporation tax

An MEP has criticised the European Commission over its handling of the proposed EU-wide corporation tax policy, saying it has fudged its figures trying to persuade sceptical countries to come on board.

Brian Hayes said it was “unacceptable that the commission cannot give a full country-by-country impact assessment” of the common consolidated corporate tax base.

The Commission said last last October it was looking at overhauling the way in which companies are taxed in the single market, saying it wanted to deliver a growth-friendly and fair corporate tax system. It said the tax base would create equality for multinationals in Europe by closing off avenues used for tax avoidance.

It would look to introduce a single rate, meaning Ireland’s 12.5% rate would be streamlined. The ESRI has said Irish corporation tax revenues would fall about 5.5% if the tax base was implemented across the EU.

Mr Hayes wrote to economic affairs commissioner Pierre Moscovici, alerting him of an Ibec study suggesting a loss of about 7.7% of Irish tax revenues if the tax base was implemented. Mr Moscovici said the study was “interesting” but reiterated the Commission’s belief that the tax base was the best way for “a resilient and competitive corporate taxation system” in the EU. Mr Hayes said a “dose of reality” was needed if the Commission wanted the tax base to work.

“We must remember that this is the Commission’s proposal, they have ownership of it. If they want to convince member states to back it, they need to have the necessary evidence available.

“How can any member state logically sign up to a proposal like this when they don’t know the exact impact it will have on their tax revenues?” he said.