European committee may question Noonan on corporate tax avoidance

Minister for Finance Michael Noonan may be summoned to appear before a special European Parliament committee on corporate tax avoidance, after MEPs yesterday agreed to set up a parliamentary committee to examine tax rulings in the wake of the "Lux Leaks" scandal.

The heads of the main groups in the European Parliament agreed to set up a special committee on tax yesterday following the Luxembourg Leaks scandal last year which revealed how Luxembourg had struck tax deals with individual companies.

The European Union is clamping down on tax avoidance by multinationals, following significant public outrage across Europe about revelations that corporations are cutting their tax bills.

Parliament sources yesterday said a number of EU finance ministers, including in Ireland and the Netherlands, are expected to be requested to appear before the committee.

Tax deals

Senior executives from multinational firms that profited from tax rulings will also be summonsed, while the European Commission president, Jean-Claude Juncker, who was prime minister of Luxembourg when many of the tax deals revealed by the Lux Leaks scandal were negotiated, could also be requested to attend.

The Lux Leaks investigation was undertaken by the International Consortium of Investigative Journalists of which The Irish Times is a partner.

The committee will initially have a six-month timeframe which may be extended to a year.

Speaking to The Irish Times, the co-president of the Green Group in the European Parliament, Phillipe Lamberts, who has been leading calls for a parliamentary enquiry into tax, said his preference would be "to have a diversity of testimonies", including from finance ministers, prime ministers, chief executives and whistleblowers:

“It is important that we have a continuous stream of disclosures to continue pressure on the commission and member states to put an end to unfair tax practices.”

Mr Lamberts expressed frustration only a special committee rather than full inquiry committee had been established, though Liberal Group Alde maintained that the special committee would allow the inquiry a broader reach.

Ireland is one of four EU countries under investigation by the European Commission’s powerful competition division for tax rulings offered to multinational companies.

The commission’s verdict on its investigation of Apple’s tax deal with Ireland is expected to be published before May.

The Taoiseach is understood to have strongly defended Ireland’s corporate tax regime during a meeting with Mr Juncker yesterday in Brussels.

Unchanged rate

“In so far as tax is concerned, President Juncker is very clear that the setting of corporate tax rates is a matter of national competence under the treaties, and that there will be no change in Ireland’s tax rate of 12.5 per cent.

"We're very clear on that and so is the president," Mr Kenny said following the meeting.

He also said that he had informed Mr Juncker of the various changes introduced by Ireland to its corporate tax regime in recent years, including the abolition of the stateless concept and the “double Irish” structure in last year’s budget.

“We have nothing to hide,” Mr Kenny said.

The former Luxembourg prime minister has pledged to clamp down on tax avoidance at a pan-EU level, with his commission pledging to revive the controversial Common Consolidated Corporate Tax Base which is strongly opposed by Dublin.