Europe considers ‘nuclear option’ on tax that would end Ireland’s right to veto
EUROPEAN tax commissioner Pierre Moscovici has heaped fresh pressure on Ireland, warning of extraordinary powers to strip EU states of their veto power on tax matters.
One EU official called it “the nuclear option” on tax issues because it could break prolonged legislative deadlocks.
But it could also be seen as an interference with national powers, and Irish EU Commissioner Phil Hogan vowed to resist it.
Bigger EU states are pushing for the reforms that would reduce tax avoidance.
But the most ambitious plans have been blocked mainly by smaller countries, such as Luxembourg, Malta and Ireland.
Now the European Commission is considering triggering a neglected article of an EU treaty to suspend states’ veto powers on tax matters.
“We certainly don’t exclude using it. We will work on it. We will make proposals in that direction,” Mr Moscovici said. “We will work on Article 116 having in mind the idea of having results, not to make a coup.”
Under article 116 of the EU Lisbon treaty, the unanimity rule could be dropped – meaning states take decisions on tax matters by majority.
Mr Hogan said that he had not heard the comments by his colleague. But he strongly insisted that his own views on taxation being the responsibility of national governments had remained totally unchanged.
“I have always said that taxation is a matter for the governments of each member state. It requires a unanimous decision of the member states to allow any change in that position.”
Earlier it emerged that some of the top-earning businesses in Ireland paid zero corporation tax – some even got a rebate.
The Comptroller and Auditor General (C&AG) told the Public Accounts Committee that eight out of the 100 companies with the highest taxable income “had an effective tax rate of zero, including some which had negative rates”. Where companies had negative rates they would have received rebates.
“A further five had an effective rate of less than 1pc,” the C&AG Seamus McCarthy said.
Revenue chairman Niall Cody said he did not believe Ireland was a tax haven.
Revenue chiefs told the committee that Apple’s €13bn won’t be collected this year, despite the threat of legal action from the EU.
Senior official John Hogan said: “We are putting in the framework to capture this money.”