German envoy at odds with TD over tax

OIREACHTAS COMMITTEE:THE GERMAN ambassador to Ireland has said his country disputes a study which found that the effective rate of corporation tax in France was higher than it is in the State.

Dr Eckhard Lübkemeier clashed with Fianna Fáil TD Timmy Dooley at the Oireachtas Committee on European Affairs over the possibility of a common consolidated corporate tax base (CCCTB).

The ambassadors of Germany, France and Spain all attended the committee yesterday to discuss the issue of the fiscal compact which will now be put to a referendum in Ireland.

Dr Lübkemeier asked Mr Dooley to show him the documents which suggested Ireland would be a loser if CCCTB was introduced.

The German ambassador then went on to reference a report called Paying Taxes 2011published by the World Bank and PricewaterhouseCoopers.

It found that although the headline corporation tax rate for France was 32 per cent, the effective rate was 8.2 per cent, while Ireland’s effective rate was 11 per cent. Dr Lübkemeier continued: “There was this famous PricewaterhouseCoopers report that the effective tax rate was higher in France than in Ireland.

“I just want to make it clear from our point of view this is not the case. From a German point of view, we dispute this study.” He described CCCTB as a “side issue”.

French ambassador Emmanuelle d’Achon said her government had got the message that Ireland did not want any change to the 12.5 per cent corporation tax rate.

She said at a time of “bailouts and austerity”, it would be “very wrong and a red line for Ireland”.

The Spanish ambassador Javier Garrigues said Spain was a “great admirer” of how Ireland was recovering from recession. He said the fiscal compact constituted a “balanced approach” to Europe’s problems.

Fine Gael Senator Fidelma Healy-Eames said Germany was rebuilt with Marshall Plan money but German chancellor Angela Merkel was against bolstering the EU’s bailout fund when so many people saw the firewall as being necessary.