'Majority voting' could see five states decide EU taxes
Plans to end the veto of EU member states on tax changes could leave just five countries in control of taxation policy for Europe, a Department of Finance briefing warned.
The EU Commission had in January suggested moving to a system of "qualified majority voting" for tax, a move which is vigorously opposed by Ireland.
In an internal briefing prepared for Finance Minister Paschal Donohoe and his department, officials warned that five member states - Germany, France, Italy, Spain, and the UK - would be able to create a majority voting bloc on the basis of population.
The document explained: "Should the UK leave the EU, it will still be possible for as few as five member states to achieve a qualified majority."
The briefing warned that any moves towards this type of voting "represents a threat" to Ireland's ability to set its own tax and said that "Ireland's voice would be diminished" in negotiating future tax deals.
However, the briefing said that the proposals to end the tax veto were unlikely to find support, and that it would not just be Ireland opposing them. The briefing explained: "Many member states are expected to have serious concerns about the Commission's proposals in this area. As unanimity is required to make any changes, it is difficult to see any agreement being reached."
The document also described how the EU Commission believed recent changes to rules on how multinationals and large companies pay tax were only achieved "due to public pressure" and had little to do with "an actual desire" for change from member states. It said the Commission also believed that countries in the EU - including Ireland - were using tax policy to play "off against each other".
Internal emails also show how the department believed Ireland was likely to be seen as the ringleader in opposing any tax changes.
One senior official wrote: "Ireland would not be supportive of ... [the] move and may potentially be singled out as the leader of the opposition.
"In reality, I expect the majority of member states would also oppose the proposed change."