The Government has firmly set out its opposition to tax harmonisation and the European Commission's plans to introduce a Common Consolidated Corporate Tax Base (CCCTB).
In a statement published on the Department of Finance website, the Government states that although Ireland supports the Commission's efforts in transforming the European Union into the most competitive economic zone in the world, 'we do not believe that the introduction of a CCCTB could advance the Lisbon Agenda nor that it could improve the competitiveness of the European Union'.
The statement goes on to say that the Irish Government does not favour the CCCTB for reasons of principle and practicality. 'The proposal cuts across national sovereignty and subsidiarity. We believe that choices on taxation and expenditure are matters for each Member State. It is for each Member State to decide on the structure of its own tax system reflecting its historical traditions and social and economic priorities,' says the Government.
Speaking at the Finance Dublin Conference on March 26th, Enda Faughnan, a partner with PricewaterhouseCoopers, said, 'To date the convergence of corporate taxation systems within the EU has operated very much to Ireland's benefit and Ireland's success in terms of attracting inward investment, particularly from the US, has been remarkable. However, a threat is emerging in the form of the CCCTB, which will have to be monitored closely to ensure that it does not threaten the central core of Ireland's fiscal policy'.
He added that this approach is very unlikely to favour Ireland and is being resisted strongly, not only by Ireland, but by a number of other Member States, including the UK who resent any intrusion into their ability to structure their own tax system.
The Commission is proposing to bring forward a formal proposal on the CCCTB sometime in 2008, but Ireland is joined in its opposition to 'harmonisation by the back door' by several other member states, including the UK. As such, it is unlikely that the unanimity which is required for all decisions taken on taxation issues will be attained at that stage. |
