EU proposals aim to curb tax evasion

A new range of EU-wide proposals aimed at clamping down on tax evasion will not affect Ireland’s attractiveness as a destination for foreign multinationals, Irish tax experts said yesterday.

EU Tax Commissioner Algirdas Semeta yesterday outlined a series of measures designed to curb tax evasion in the wake of a number of controversies involving the tax arrangements of multinational corporations such as Amazon, Google and Starbucks.

The “action plan” contains 30 measures to be undertaken by European countries in a bid to minimise tax avoidance and evasion. These include a commitment to review corporate merger rules, the introduction of an EU-wide tax identification number and the adoption of common anti-abuse standards by EU countries.

While the proposals will be presented to European finance ministers and the European Parliament next year – most likely during Ireland’s presidency of the EU – they are not expected to be binding.

The activities of non-EU jurisdictions were also highlighted in the report, which called on European countries to identify tax havens and place them on “blacklists”. European countries should also encourage non-EU countries to adopt EU governance standards on tax, the report said.

Switzerland was specifically mentioned by EU Tax Commissioner Algirdas Semeta. “I can openly say that we consider that several tax regimes in Switzerland, according to our estimations, do not meet criteria of the code of conduct on business taxation,” he said, referring to the EU’s existing code of conduct.

Brian Keegan, director of taxation with Chartered Accountants Ireland, said the announcements will have little practical consequences for Ireland.

“For existing OECD member countries like Ireland, there is little that is new in the EU package that has not already been recommended and implemented by the OECD,” he said.

Welcoming the proposals, the Department of Finance said that it doesn’t expect the recommendations to have any adverse effect on Ireland’s tax system or competitiveness.

“From our initial analysis there are no surprises and the package is along expected lines,” a spokesman for Minister for Finance Michael Noonan said yesterday.

“There are no particular issues here for Ireland and we will support the Commission’s proposals.”

Separately, Starbucks said it could pay about £20 million in corporation tax in Britain over the next two years, surrendering to widespread public criticism over allegations of tax avoidance. – (Additional reporting: Reuters)