The EU and taxation policy
A chara, – In a letter (April 5th) concerning the EU’s proposed Common Consolidated Corporate Tax Base (CCCTB), Brian Hayes MEP quotes the Irish Government’s position that “corporate tax rates remain an exclusive competence of member states”.
The CCCTB will have no impact on national corporate tax rates, as EU officials have insisted repeatedly.
The aim of the CCCTB is to establish the amount of taxable income earned by large firms within the EU.
This income will then be allocated among member states according to a formula based on a firm’s sales, employment and assets in each state.
Each state will then tax the amount of taxable income allocated to it according to that state’s existing corporate tax rate, which will remain unchanged.
The CCCTB has been proposed because of the way in which large amounts of taxable income generated in the EU are being channelled through certain member states (including Ireland) which levy very little tax on this income.
As a result, EU governments, and their citizens, are denied the benefits of the revenues which would be generated were the profits made within their territories to be taxed properly and fairly.
Ireland has been a major beneficiary of revenues transferred to Ireland from fellow EU member states since 1973. Being part of an economic community involves give as well as take. It therefore behoves the Irish Government to support this measure in what should be an act of communal solidarity.
Giving priority to the tax avoidance strategies of non-European multinational firms over the welfare needs of our hitherto generous fellow member states is not in Ireland’s long-term interest. – Is mise,
Department of Geography,