Call for Ireland to push ahead issue of common corporate tax base

Fri, Jan 11, 2013, 00:00

The European Union’s tax commissioner, Algiras Semeta, has told a parliamentary committee that the “day of isolated tax policy” in Europe is over.

Addressing the Oireachtas Committee on Finance yesterday afternoon, Mr Semeta said that while member states retained their sovereignty on tax matters the issue of taxation could not be avoided in the debate about deepening European integration.

While the commissioner did not refer to corporation tax during his address he called on Ireland to help “push forward” the common consolidated corporate tax base (CCCTB) during its presidency. “I would reiterate that the CCCTB has nothing to do with tax rates, and Ireland has nothing to fear in this regard. Member states must remain free to set rates and this flexibility allows a healthy degree of tax competition to be maintained.”

The proposed EU-side CCCTB tax would allow all countries to submit one centralised tax return across all EU countries in which they operate. The Government has previously voiced concerns that this could make it less attractive for firms to take advantage of Ireland’s low 12.5 per cent tax rate.

Mr Semeta, a former finance minister of Lithuania, also referred to the financial transactions tax (FFT), a tax on the financial industry which was proposed by the European Commission last year. Ireland, along with other countries including Britain, chose to opt out of the tax.

“Although Ireland is not one of the 11 member states signed up to the FTT I am confident that it will facilitate progress during its presidency,” he said.

Official visit

Mr Semeta was one of a number of commissioners in Dublin yesterday as part of the European Commission’s official visit to Ireland.

The sensitive issue of Ireland’s corporate tax rate has remained off the agenda in the run-up to Ireland’s assumption of the presidency of the European Council.

Taoiseach Enda Kenny yesterday reiterated the need for Ireland to achieve a deal on its bank debt following meetings between Cabinet Ministers and the College of Commissioners. He welcomed the support shown by the European Council and European Commission on finding a solution to the issue.