EU probe poses fresh threat to our 12.5pc corporate tax rate
Ireland is facing a fresh threat to its 12.5pc corporate tax rate, as MEPs begin investigating low rates across Europe.
A 45-member EU Parliament Tax Inquiry Committee, formed in the wake of the Lux Leaks scandal, has been tasked with investigating various tax arrangements in countries across Europe.
The committee was formed after 190 MEPs signed a petition calling for an investigation to be initiated.
However, Luxembourg and Ireland are being singled out for investigation and the probe is being seen by the Government as the latest attempt to force it to abandon the 12.5pc rate.
A delegation is to travel to Dublin next month and is expected to take evidence from Finance Minister Michael Noonan and some of his senior officials.
Fine Gael MEP Brian Hayes, who is one of two Irish members on the committee, told the Irish Independent that the probe represented a real threat to Ireland. However, he said he and other Irish MEPs must do all they can to ensure our tax independence is upheld.
"This tax committee cannot be a witch hunt against small countries. I am deeply concerned about a growing attitude that exists to get small countries on their tax systems," he said.
"For this committee to have any credibility, it must look at schemes in every country. It cannot single out smaller states like Ireland. The idea that our tax rates could be harmonised is outrageous. All MEPs must work to ensure that the integrity of the Irish taxation system is upheld."
Ireland is one of four EU countries under investigation by the European Commission's powerful competition division for tax rulings offered to multinational companies.
The commission's verdict on its investigation of Apple's tax deal with Ireland is expected to be published before May.
The committee's mandate is for six months but it can be extended should it deem it necessary. It will produce a report which will make recommendations for the EU Commission.
Speaking in Texas yesterday, Taoiseach Enda Kenny said: Our transparent 12.5pc corporate tax rate is clear and our commitment to it is rock-solid. We have added to this some of the best incentives in the world for research and development."
Separately, Tánaiste Joan Burton will tomorrow call on the EU Commission to grant Ireland greater budget flexibility.
"We need some flexibility from the commission so that we can build on the progress we have made and sustain the recovery. I believe the Government should have all possible options open to it," she will say in a speech in Boston.