Dutch MEP Paul Tang, a rapporteur on European tax policy, appeared before the Oireachtas finance committee and said Ireland has not taken into account the impact its corporate tax rate has on its European partners
He described countries like Ireland and Luxembourg as “tax pirates” because of tax measures taken to attract multinational companies: “A small country like Ireland has more foreign investment than Germany or France — that’s weird.”
Ireland’s investment is down to “loads of paper constructions” to avoid taxes, he said. Big corporations “pay hardly any tax”, he said, and have avoided €5bn tax in Europe: “It’s about fairness. Where they generate profits is where they should pay taxes.”
He described the tax arrangements of multinationals as “paper constructions to avoid taxes”. They don’t affect the “real economy, or jobs or factories”.
The problem is that it is not known what the impact such tax rates have on other countries, said Mr Tang: “Ireland doesn’t take into account the impact of its actions on its European partners. My claim is that you’re stealing the tax base from other countries.”
He called for a digital tax for the tech giants. Europe must lead the way, he added.
MEP for Dublin Brian Hayes said comments made by Mr Tang reinforce the idea that a small number of big member states simply want to shift corporate tax revenue from Ireland to their countries, and said that bigger states such as France are being “disingenuous”.
“Yes, it is true that Ireland claims more investment from the United States than France and Germany combined. However, this is something we should be proud of — we have developed a highly competitive business environment with a skilled workforce and a young population that has evolved into a hub for technology firms.”
Mr Hayes said there is value from foreign direct investment here, with Google employing more than 6,000 people in Ireland; Apple more than 4,000; and Facebook more than 2,000.
“These are real jobs and real people,” he said. He said Mr Tang had admitted he did not know what effect common consolidated corporate tax base would have on Ireland’s corporate tax revenue.
“How can Ireland ever sign up to something where we don’t know what the clear impact will be on our tax revenue? Estimates have put it that Ireland could lose over 50% of its tax revenue from CCCTB. Ireland’s corporate tax system is clear and transparent,” Mr Hayes said.