EU seeks assurances on 15% corporate tax rate

THE chairman of an EU tax subcommittee is looking for renewed assurances that Ireland is still committed to a minimum corporate tax rate of 15%.

There are lingering concerns from EU institutions about Ireland’s ability to regulate several tech giants with headquarters in Dublin.

Dutch MEP Paul Tang and five other MEPs from the European Parliament subcommittee are due in Dublin today for a two-day visit. They will meet Finance Minister Paschal Donohoe, a representative of Revenue, and groups including the Irish Congress of Trade Unions and the Irish Business and Employers Confederation.

Ahead of the visit, Mr Tang, chairman of the European Parliament’s FISC committee, told PA news agency that one of its purposes is ‘to conclude decisions on the minimum corporate tax rate’.

In 2021 more than 130 countries, including all EU member states and members of the Organisation for Economic Co-operation and Development (OECD), agreed to set a minimum global corporate tax rate of 15%.

Although Hungary indicated in June that it is no longer backing the proposal, Mr Tang said there is ‘a clear initiative’ for EU member states to bypass Hungary’s veto to continue with the deal.

‘I would be happy to hear that Ireland is still part of the initiative. That would be good for the OECD agreement, but it would also be a good response to Hungary if the member states unite and decide with 26 (out of 27) to implement the minimum corporate tax rate.

‘I know it’s a sensitive topic in Ireland,’ he added.

When asked if he was unsure of Ireland’s stance on corporation tax, Mr Tang said: ‘I’m not sure, but I would be happy to hear that Irish politicians and policy-makers confirm their position. That would be good.’

Also being discussed will be the European Commission’s proposals for an EU-wide withholding tax, and to ask Ireland to commit to an EU directive tackling shell companies, often used either to avoid paying tax on earnings accrued elsewhere or to launder money.

‘What does Ireland do, and does Ireland do enough?’ the Dutch MEP said, adding that his own country and Luxembourg would also be ‘in the spotlight’ on whether they do enough to promote a fairer tax system.

Mr Tang said different political groups are united in the idea that tax avoidance and tax evasion should be ‘tackled very hard’ across the EU.

‘I want Ireland – but also Luxembourg and the Netherlands – to have this pro-European mindset’ in relation to tax evasion, he added.

As well as the FISC delegation, the European Parliament’s LIBE committee, which has competencies over data protection, is also due in Dublin.

Ireland’s Data Protection Commissioner was criticised for proposing a fine of €50million against WhatsApp for breaches of privacy laws, but the fine was increased to €225million after it consulted with its European partners.

Mr Tang said: ‘I understand that Ireland has benefited a great deal from foreign direct investment, most notably from the big tech.

‘But it’s not a way to lure them into Ireland by offering possibilities for tax avoidance or to lack standards for data protection.’

‘I know it’s a sensitive topic’