DUBLIN: Ireland should continue to set its own rate of corporate tax, according to the chairman of the European Parliament’s Special Committee on Tax Rulings.
French MEP Alain Lamassoure, inset, told the Institute of International and European Affairs (IIEA) in Dublin yesterday that the EU should integrate its tax policy, without getting power to set rates. Ireland should keep its 12.5pc rate, which has proved successful in attracting investment, he said.
France, with a corporate tax of 33pc, has long been a vocal critic of Ireland’s lower rate. In 2011 former French President Nicolas Sarkozy said Ireland should not ask the European Union for emergency bailout funds unless the corporate tax rate was revised.
The Special Committee on Tax Rulings issued a report which recommends that all EU states should report on the profits made by multinationals, along with information on tax paid, and any subsidies received.
Companies, for their part, should provide country-by-country reporting on profits as well information about their activities in the countries where they operate. The aim is to make sure firms pay their taxes where they make their profits.
Despite the recommended changes, Mr Lamassoure says he is still in favour of Ireland retaining the power to set its own corporate tax rate.
When I discussed this with the Irish they were keen on setting the tax rate and attached to the current rate, my recommendation is we define the taxable profit the same way [across the EU], it would be the same as with VAT where we have the same definition of the taxable base, but we compete on the tax rate so Ireland can remain attractive with its 12.5pc rate,” he said.
I remember that Sarkozy was very critical of Ireland and the tax rate. When we discussed the Irish programme in 2010 one of the French demands was an increase in the tax rate.
I argued against it and I still argue that if it is Ireland’s choice, so be it. A lot of experience demonstrates that the lower the rate, the higher the income from the tax,” he said.