Commission tries to ease Irish fears

THE European Commission has met a number of Irish fears over plans for a common consolidated corporate tax base (CCCTB) when it discussed the latest progress report on the plan.

But the Irish Banking Federation, the Irish Taxation Institute and IBEC, representing business, came out against the plan insisting that it paves the way for a harmonised tax rate across the EU and would reduce Ireland’s tax take.

The financial sector is not currently included in the proposal but is expected to be at some stage, the commission said.

The proposal, which should be finalised next year, would allow companies to make just one tax return for all their branches in the EU. Each member state will have the option of adopting the common rules for calculating tax returns or of opting out.

Taxation Commissioner Laszlo Kovacs argues that the CCCTB would reduce company compliance costs by 5% and would be even more of a saving for small and medium sized enterprises.

Internal Market Commissioner Charlie McCreevy is vehemently opposed to the plan.

As a result of his interventions at yesterday’s commission meeting he was assured that two possible scenarios would not be part of the final package.

These relate to a central appeals court and one of the proposed sharing mechanisms under which the country in which the goods are sold would qualify for half the tax.

Mr McCreevy said this would work against the interests of a small country like Ireland.