Enda Kenny welcomes extension of tax inquiry to all 28 EU states

Taoiseach Enda Kenny has welcomed the move by the European Commission to extend a request for information on tax rulings to all 28 EU member states, as he vigorously defended Ireland's corporate tax regime ahead of a discussion on tax at yesterday's European Council in Brussels.

The Taoiseach said it was important that “what’s been put in place by one will now apply to all”.

"Ireland has already been very much upfront here. We abolished the stateless concept last year, this year we abolished the Double Irish with a transition period to 2020. We are participating completely, fully and openly with the OECD and BEPS analysis, and we'll play our part and continue to do so," he said. "What we will not be dealing with is any change to Ireland's corporate tax rate. That's a matter of national competence."

Ireland is one of three European countries under investigation by the European Commission for a breach of state aid rules, regarding the tax arrangements struck by the Irish authorities and US computer company Apple. A decision is expected on the investigation in the first half of next year.

Tax rulings

But in a surprise move, the European Commission on Wednesday announced that its state-aid division would now extend a request for information on tax rulings to all 28 EU member states.

To date, only six countries have been asked for information on their tax rulings – tax agreements negotiated between tax authorities and individual companies – with an official investigation opened into Ireland, the Netherlands and Luxembourg.

Mr Kenny stressed that tax remained a “national competence.”

“We’re very clear on this, we’re very upfront we’ve nothing to hide, we defend completely our right in a national competence fashion to set our corporate tax rate.”

Meanwhile, ahead of yesterday's summit at which the €315 billion investment plan was also discussed, German chancellor Angela Merkel told the Bundestag that Ireland was a good example of how the economic approach pushed by Berlin could bear fruit. Ireland had "followed consequentially the path of reform" and was now "growing strongly, attracting investment with unemployment dropping step by step", she said. "This shows what decisive action can achieve."

A discussion on taxation was pushed on to the agenda of the European Council meeting at the behest of a number of larger member states including France and Spain.

EU officials close to Donald Tusk also said that the fight against aggressive tax planning would be a priority of the new president. "A large majority of member states wanted to see a text on taxation [from this summit]" a senior official told The Irish Times. "Given the public anger against the tax dealings of multinational companies, it is natural that the issue is on the agenda."