Irish MPs are amongst the many politicians and legislators who have reacted angrily to French President Emmanuel Macron’s proposal to introduce a single European corporate tax rate. Macron has domestically been calling for a single-bloc rate, but such a plan has little support outside France.
Irish MEP, Brian Hayes, is one such opponent, saying “Marcon’s new corporate tax rate band may go down well in Paris, but there is overwhelming opposition in most of Europe to harmonisation of tax rates.”
Hayes also pointed out that corporate tax rates are not in the gift of the EU, but are for Member States to decide.
Macron has been accused of a conflict of interest, with critics citing the difference between the French corporate tax rate of 30% and the 12.5% rates which prevail in Ireland and Cyprus, with the President seen as trying to prevent smaller countries in the European Union from being able to attract foreign direct investment (FDI).
Hayes commented” Tax competition between countries is good for Europe and good for European investment. Tax competition keeps Europe on its toes and makes sure that business stays in Europe”.
This is not the first time that Irish politicians and the EU have found themselves in conflict over corporate tax policy in recent weeks. Last week, Irish MP, Michael Fitzmaurice, accused European Commissioner Jean-Claude Juncker – who he described as an unelected bureacurat – of acting like a dictator when it comes to tax, saying that, under no circumstances should he be “allowed to dictate what should happen with regard to tax rates in Ireland or anywhere else for that matter“.
Ireland has also reacted angrily to last week’s decision to refer the country to the European Court of Justice for its failure to recover €13 bn. in back taxes from Apple, whose European headquarters is based in Dublin. They contend that the EU does not understand Irish law, that the interference by the EU, in what they regard is a domestic tax matter, is an infringement of national sovereignty, with a spokesman for the Finance Ministry in Dublin previously commenting “Ireland does not do deals with taxpayers”.
At least it appears that Macron’s proposals do not have much current traction, with Vanessa Mock, the Commission’s spokesperson for taxation and the customs union declaring “when it comes to taxation, tax rates are an area of national sovereignty, and the Commission has no intention of interfering with that. Neither do we plan a harmonisation of corporate tax rates.”