Saturday 19 October 2019

Michael Noonan hits out at EU's plan for tax disclosure

Finance Minister Michael Noonan. Photo: Tom Burke
Finance Minister Michael Noonan. Photo: Tom Burke

Colm Kelpie

Finance Minister Michael Noonan has dismissed plans by Europe to force big companies to publicly disclose information about their profits and taxes paid.

Effectively snubbing the proposals by the European Commission, the minister warned against any moves that would undermine the Organisation for Economic Cooperation and Development's (OECD) attempts to clamp down on global tax avoidance, known as the Base Erosion and Profit Shifting (Beps) process.

Last April, the Commission unveiled a proposal introducing public reporting requirements for the largest companies operating in the EU.

But at corporate tax event in Dublin Castle yesterday, Mr Noonan, pictured, criticised the move. "The Commission's proposal for public country-by-country reporting goes against the Beps consensus that the value of these reports is in enabling tax authorities to see what is really happening and carry out more informed audits and assessments," Mr Noonan said.

"Other non-EU countries have suggested that any public reporting requirement could result in them no longer sharing the country-by-country reports filed with their tax authorities. Ultimately, it is important that a consistent global approach is taken on this issue as with other issues."

The Commission wants to see multinationals operating in the EU with global revenues exceeding €750m a year to publish key information on where they make their profits and where they pay their tax in the EU on a country-by-country basis.

Mr Noonan also argued there couldn't be two international solutions to the one problem. "Where EU action moves away from the Beps consensus, caution is needed. No man can serve two masters, and no country can implement two competing philosophies on how companies should be taxed," he said.

The minister was speaking at a Government-supported corporate tax event in Dublin Castle entitled 'Fairness, Responsibility and Leadership', focusing on tax and developing countries.

The event was attended by representatives of international bodies, including the United Nation, as well as NGOs such as Christian Aid Ireland.

Mr Noonan said there had been some "inaccurate criticism" of Ireland's engagement with developing countries on tax in recent times.

"I strongly disagree with reports which paint a misleading and inaccurate picture of the small number of tax treaties which Ireland has with developing countries," he said.

"None of those treaties were entered into without the agreement of the counterparty country. Ireland's treaties with developing countries take elements from both the OECD and the UN model treaties."

Sorley McCaughey of Christian Aid Ireland said tax avoidance is an issue for developing countries, which lose between $200bn and $300bn each year and he said public perception of Ireland internationally is unfavourable when it comes to corporate tax issues.

"I go all over Europe and different parts of the world, and without fail, in every forum I speak at, people on the panel refer to Ireland as a tax haven," he said.

"Be that as it may, and it may or may not be correct, depending on your point of view, the reputational damage is done. It's perception. At the heart of this conference today is Ireland's reputation internationally."

Children's Minister Katherine Zappone, who was involved in the conference's establishment, said inadequate taxation results in inadequate resources to fund basic public services. "Tracking down tax avoidance and increasing our tax transparency will not hurt Ireland's economy," she said.

Irish Independent

Also in Business