Planned EU tax rules have ‘serious implications’ for State

Department of Trade briefing urges intervention by Minister of State Robert Troy

Minister of State   Robert Troy described the taxation move as ‘very controversial’. Photograph: Alan Betson

Minister of State Robert Troy described the taxation move as ‘very controversial’. Photograph: Alan Betson

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Planned EU rules for country-by-country tax reporting by multinationals would have “serious implications” for Ireland’s competitiveness and ability to attract investment to the country, according to a Department of Enterprise, Trade and Employment briefing.

The briefing said it was “strongly recommended” that Minister of State for Trade Promotion Robert Troy should make an intervention to oppose the tax changes at a public debate.

The European Union wants the new law to force multinationals to report their tax payments and activities for each member state to increase transparency.

However, a departmental briefing warned this would not benefit Ireland and was likely to impact investment from inside and outside the EU.

Implications

The brief said: “This proposal has serious implications for our competitiveness and ability to attract FDI [foreign direct investment] from both within and outside the EU, as countries including the US and Japan oppose publication of tax information.”

It also warned Mr Troy of a possible conflict where he would be speaking against the change while it was being supported by Ireland’s EU commissioner Mairead McGuinness.

“This means a commissioner from Ireland will speak in favour of a proposal while Ireland will intervene in opposition,” the briefing said.

Access to the briefing had originally been refused by the department but was released following an appeal.

Mr Troy was told that the matter had been deadlocked since 2016 but that the EU now had enough support – 18 member states – to move it forward.

It said Ireland should “continue to speak” against the proposal along with what were described as “six other like-minded member states”.

The briefing said any comments Mr Troy made were unlikely to halt the changes but would reinforce Ireland’s “principled opposition” to the move.

The briefing note said: “[Your remarks] are unlikely to change the commission’s or supporting EU member states’ views on the legal basis of the file.

“However, Ireland’s position should be maintained to ensure our principled opposition to the file proceeding . . . on the current legal basis is noted along with our commitment more generally to transparency.”

Intervention

It said an intervention was strongly recommended and that this approach had been discussed with both Tánaiste Leo Varadkar and Minister for Finance Paschal Donohoe.

Ireland has consistently opposed the changes because it is considered a tax measure, which the Government claims should be dealt with using different legislation and by finance ministers.

This would mean unanimous support would be required rather than a qualified majority, meaning the new laws could be vetoed by a member state.

The briefing also provided a background note for Mr Troy saying the taxation move was “very controversial”.

“Ireland has consistently voiced our opposition to the file proceeding . . . on a principled basis,” it added.

Asked about the briefing, a department spokeswoman said: “A public policy debate on public country-by-country reporting took place at the Informal Competitiveness Council on February 25th. Robert Troy . . . set out Ireland’s position at this council meeting.”

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