European Commission officials have insisted Ireland’s 12.5% corporation tax rate is not under threat from the proposed new corporation tax plan out of Brussels, as they faced a barrage of criticism from TDs and senators.
Tax officials appeared before the Oireachtas finance committee, at times facing aggressive questioning from members about the impact on Ireland of Brussels’ relaunched proposal for a Common Consolidated Corporate Tax Base (CCCTB)
Bert Zuijdendorp, head of unit company taxation initiatives at the commission, denied that Ireland’s 12.5% corporation tax would be targeted by the CCCTB, insisting it was simply an easier way for member states to regulate and streamline their corporate tax systems.
Fine Gael TD Peter Burke said CCCTB would be an “unmitigated disaster” for Ireland, while Independent senator Kieran O’Donnell said it would be a “Trojan horse” that would allow the EU even more control over small states such as Ireland.
Fianna Fáil’s finance spokesman, Michael McGrath, said he could not see the CCCTB proposal “going anywhere” and that it was a clear encroachment into the competence of a member state of the EU.
Mr Zuijdendorp said he did not believe there was going to be any encroachment into member states and that he would be too cautious to say it would have a negative impact on any member state.
Department of Finance officials told the committee they were sceptical about the CCCTB plan.
Rónán Hession, head of business tax at the Department of Finance, said officials were going into an examination of the CCCTB proposal with “an open mind, not an empty kind”, but that they would do so with a “professionally sceptical” attitude.
The commission said in October that it was looking to overhaul the way in which companies were taxed in the single market, saying it wanted to deliver a growth-friendly and fair corporate tax system.
It said the CCCTB would create a level playing field for multinationals in Europe by closing off avenues they used to avoid paying tax in Europe.
In a report this week, the Economic and Social Research Institute said Irish corporation tax revenues would fall by about 5.5% if the CCCTB was implemented across the EU.
The report also envisaged that the CCCTB would hit Ireland’s GDP.
France would be the biggest beneficiary if the CCCTB was introduced, increasing its corporation tax revenues by 6%, according to the ESRI.
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