EUROPE NEEDS to find ways of competing with the rest of the world for foreign direct investment rather than fostering competition between its own member states, a director of the Ireland France Chamber of Commerce has said.
Ursula Tipp, a German tax expert and head of tax at law firm Byrne Wallace, was speaking at a debate on Ireland’s corporate tax rate and the common consolidated corporate tax base (CCCTB) organised by the Ireland France Chamber of Commerce in Dublin last night.
“The biggest threat to foreign direct investment is from outside Europe, countries such as Singapore, China and India. If a US company decides not to come to Ireland, it is likely that it won’t go anywhere else in the EU. Europe in effect loses out.”
She also pointed out that Ireland has one of the most transparent and simple tax regimes in the world. “The Irish corporate tax regime is in fact the role model for a good corporation tax system. Its broad-based tax system is one that is being replicated by other countries.”
Fergal O’Brien, chief economist at IBEC, said a debate on the CCCTB was timely, pointing out that last Wednesday was the deadline for countries to formally consider the issue from the point of view of the principle of subsidiarity and issue a “reasoned opinion” on the matter.
Earlier this week, Ireland became the latest country to reject the CCCTB proposals, after the Dáil passed a motion to rebuff them on the grounds of subsidiarity.
Mr O’Brien said the fact that a number of parliaments, including those of the UK and the Netherlands, have raised questions about the proposal, means it is now “politically a challenge” for the European Commission to move on with the proposals.
He also highlighted the findings of a recent report by Ernst and Young on the impact of CCCTB on European business, which found that compliance costs would rise 13 per cent and the average EU tax rate increase if the proposals were introduced, making Europe less attractive as an investment location.
The Ireland France Chamber of Commerce is one of the largest bilateral trade associations in Ireland. Founded more than 30 years ago, it has more than 150 member companies represented by more than 200 senior French and Irish executives. Its members include Air France KLM, BNP Paribas, Renault Ireland, Sanofi-aventis, Dalkia and Servier.
