John Deasy: Stop EU attacks on State policy in light of Brexit

Ireland faces economic war on two fronts with EU and UK, says Fine Gael TD

Fine Gael’s John Deasy: “Two commissioners in particular are chipping away at our competitiveness and our tax sovereignty as if nothing has changed.” Photograph: Cyril Byrne

Fine Gael’s John Deasy: “Two commissioners in particular are chipping away at our competitiveness and our tax sovereignty as if nothing has changed.” Photograph: Cyril Byrne

 

European commissioners must stop making attacks on Ireland’s competitiveness until the UK’s post-Brexit intentions are clear, the Dáil has heard.

Fine Gael TD John Deasy said Ireland will end up fighting an economic war on two fronts with the EU and the UK if the commission does not “desist”.

The Waterford TD claimed the commission was operating in relation to Ireland as if Brexit had not happened.

“Two commissioners in particular are chipping away at our competitiveness and our tax sovereignty as if nothing has changed,” he said, highlighting proposals by competition commissioner Margrethe Vestager to examine other multinationals in Ireland following the Apple investigation.

Speaking during the debate on the initial stages of the Finance Bill, which was passed by 59 to 41 votes with 37 abstentions, Mr Deasy said “we are scrambling to find direction when it comes to Brexit” and the State needed to start by confronting the European Commission.

Port of call

“Our first and immediate port of call needs to be to Mr [Jean-Claude] Juncker,” he stressed, referring to the European Commission president. “It needs to be impressed on him immediately that his commissioners need to deal with the bigger picture and desist from making any further attacks on our competitiveness until we understand how the UK intends to proceed post-Brexit.”

The British could lower their corporation tax below 10 per cent as they had had their eyes on Ireland’s tax system for years, he warned. “We are potentially about to enter a war with the UK on the basis of competitiveness and attracting inward investment and we are the minnow.”

Economics commissioner Pierre Moscovici two days ago relaunched the common consolidated corporate tax base (CCCTB) plan, which Ireland consistently opposed.

“If implemented, it would eat into our corporate tax revenues. It amounts to another attack on our sovereignty,” Mr Deasy said.

“We are looking at that happening on two fronts if somebody does not impress upon the European commission the implications for Ireland as a result of Brexit.”

Tax-free sector

Earlier, Independent TD Stephen Donnelly claimed the Finance Bill would make the entire commercial property sector tax-free. Speaking before the resumed debate on the Bill, which gives effect to the measures announced in the budget, the Wicklow TD said Ireland now had the second-highest commercial rates in the euro zone.

He said this was in part because of tax breaks. In recent years, the Government introduced generous tax-deferral mechanisms for landlords, including large foreign landlords, including real estate investment trusts (REITs) and Irish collective asset management vehicles.

“These tax-deferral mechanisms have led to large foreign landlords pouring money into Ireland and Dublin, which is jacking up rents on commercial and residential property.”

Commercial property

He said “the Finance Bill will make the entire commercial property sector tax-free. This will take a large chunk of assets out of the tax net.”

Mr Donnelly said these tax breaks were to be shut down in the Bill, but he claimed the Bill “has turned tax-deferral mechanisms into complete tax breaks”.

“We have gone from landlords being able to defer tax to them having to pay no tax whatsoever.”

But Minister for Finance Michael Noonan said amendments to the Bill were carefully drafted to ensure the Irish tax base could not be eroded in regard to Irish property transactions.