Irish Gov against EU tax reforms

Government’s Warning on Proposed Taxation Rules

The Government has warned the European Commission that the proposed introduction of rules on the taxation of business profits will damage Ireland’s economic recovery.

Ireland told the Commission that if the pan-European rules went through then the country faces further tax increases and public spending cuts.

EU’s Plan for European-wide Tax Calculation Formula

The Irish Times reports today that the EU plans to draft legislation in March for European-wide formula to calculate corporation tax.

Ireland has been a popular location for international corporations because of its generous tax regime but any EU-wide changes could dim its attractiveness.

Submission of Private Document to Taxation Commissioner

The Department of Finance submitted a private document to the taxation commissioner Algirdas Semeta, according to the newspaper.

The department had commissioned accountancy firm Ernst & Young to carry out a study of a common consolidated corporate tax base (CCCTB).

Impact on Other EU Countries and Employment

The CCCTB could lead to decreased profits made by international companies in Ireland, thereby lessening the benefits of the 12.5pc tax rate.

The Irish Times said the report by Ernst & Young claims that Spain, France and Belgium would be the only EU countries to not lose out if a CCCTB was introduced.

The report also suggests that employment could be hit hard if any such scheme was introduced.