Ireland opposes much of EU corporate tax plan, Donohoe says

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Ireland Opposes Much Of Eu Corporate Tax Plan, Donohoe Says
The State will be joined by other sceptical EU countries in opposing the unified tax plan, Paschal Donohoe says. Photo: PA
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Ireland will oppose much of the European Commission's plan for a more unified corporate tax regime across the bloc and will be joined by many other sceptical member states, Minister for Finance Paschal Donohoe has said.

The European Union's executive adopted the proposals on Tuesday. Its plans for EU corporate taxation rules have failed before, as setting tax rates is prerogative of national parliaments.

“Given my understanding of much of what has been proposed by the Commission, there is much in it that I would oppose and would have significant concerns about. There are many countries within the European Union that will have similar concerns to Ireland in relation to this,” Mr Donohoe told Newstalk.

The masterplan adopted on Tuesday by the Commission embraces several measures long resisted by Dublin in more than a decade of tax conflict with Brussels. The issue is acutely sensitive for the Government because reforms would erode corporation tax revenues that now account for 21 per cent of all tax receipts.

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The commission’s plan, entitled “Business Taxation for the 21st Century”, will go beyond global reforms discussed for years at the Organisation for Economic Co-operation and Development that the Government has supported.

“The context for EU business taxation policy has changed radically in the past year,” a Brussels source told The Irish Times, citing the economic shock set off by the coronavirus pandemic.

Digital levy

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The Commission wants swift action, saying it will roll out proposals in July for a digital levy on big tech companies. The levy would hit the like of Google, Apple, Microsoft and Facebook who use Ireland as their European headquarters.

The Government dismissed previous attempts to introduce such an EU tax.

Brussels also proposes to develop a new pan-EU business tax rule book to replace the common consolidated corporate tax-base plan that Dublin rejected several years ago on the basis that it would harmonise tax.

The new regime – the business in Europe framework for income taxation – will include a formula for the allocation of taxable profits between member states.

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