EU proposals for a harmonised approach to company taxation will be detrimental both to Irish and to European business interests alike. This is the message Chartered Accountants Ireland is outlining to European Commissioner, Algirdas Semeta in Brussels today (Wednesday, May 5th) in the first meeting between an Irish business group and the recently appointed Commissioner for Taxation and Customs Union, Audit and Anti-Fraud.
The Irish Chartered Accountants will be outlining the view that the so-called Common Consolidated Corporate Tax Base (CCCTB) will have a negative impact on Ireland's ability and the ability of other EU Member States alike to attract Foreign Direct investment (FDI).
The EU's proposals for a CCCTB were originally mooted in 2001. Upon his recent appointment Algirdas Semeta outlined his full support for the introduction of CCCTB. The meeting with Mr Semeta has been organised by Irish MEP Ms Marian Harkin, who has long been monitoring Ireland's interests in this area.
'This is an important meeting and we hope it will form a basis for continued and on-going dialogue between ourselves and the Commissioner as we continue to put Irish business concerns to the forefront. The consequences of a CCCTB will not be beneficial either to Ireland or to the EU as a whole' said Brian Keegan, Director of Taxation, Chartered Accountants Ireland. The Chartered Accountants will argue that the circumstances which prompted the CCCTB proposals in the first place have changed radically since 2001, and the initiative as then envisaged may no longer be necessary.
CCCTB will be damaging for Irish and European business for the following reasons, according to the leader of the Chartered Accountants Ireland delegation Mr Liam Lynch:
- Tax consolidation will damage Europe's ability to attract foreign direct investment. This is because tax payable by multi-nationals will no longer be determined by the law of the particular EU Member State alone but by a complicated formula which can only be calculated in retrospect. This makes it impossible for multinationals to predict tax charges and will discourage companies from locating in Europe.
- The administration and collection of corporation tax cannot be seen in isolation. Many Member States operate payment offset rules, for example Research and Development credits against corporate taxes. The CCCTB will diminish or impede these cash flow advantages
- The CCCTB is not simplification. It only means that the present 27 ways of calculating liabilities within the EU become 28
- There will be no flexibility in dealing with national or local issues.
- The CCCTB cannot possibly work without a pan-European Revenue Authority. - a European "Collector General". It is not clear to whom it could be accountable.