Irish ‘red line’ over EU tax law changes

IRELAND has a ‘red line’ on any EU changes to our ‘highly sensitive’ corporate tax policy, newly released Department of Finance memos show.

European Commission plans that could have removed Ireland’s veto on setting our own tax rates was taken very seriously by the department, which warned that it would have major effects for the country.

The document also described how the EU Commission believed changes to rules on how multinationals and large companies pay tax were only achieved ‘due to public pressure’ and had little to do with ‘an actual desire’ for change from member states.

An internal briefing explained how Ireland would not support any effort to change our tax sovereignty – especially as it could damage our relationship with Google, Facebook, Apple and other multinationals based here. In January, the European Commission had published a proposal suggesting that ‘qualified majority voting’ be introduced for EU tax policy – meaning that small, individual countries such as Ireland would not be able to veto reform of its own tax system.

The move would impact the ability of countries to set their own corporation tax rates with a particular focus on taxation of digital giants such as Facebook and Google. The internal brief, prepared for Finance Minister Paschal Donohoe and officials, said any such move would be ‘highly sensitive’.

‘This is a highly sensitive suggestion for many members states including Ireland,’ it said, ‘as any move to change the voting method used… would reduce member states’ sovereignty.’

It said Ireland strongly supports complete agreement being needed to change the tax policy across the EU.

‘Ireland does not see the need for, or merits of, any proposals to move away from the requirement for unanimity,’ it said.

One section flagging ‘Ireland’s position’ described how the country had consistently opposed any change on voting rules since they were first ‘flagged’ in 2017 by European Commission president Jean-Claude Juncker. In explaining why Ireland would not support any proposals to change tax voting rules, it said this was a ‘red-line issue’ for Irish citizens.

In a statement, the Department of Finance said it had no additional comment to make on the briefing. ‘The records contain comprehensive messaging about Ireland’s position on the proposal,’ it said.