Monday 19 February 2018

'We will oppose Brussels on tax changes' - Varadkar

European Commission President Jean-Claude Juncker wants reform. Picture: Reuters
European Commission President Jean-Claude Juncker wants reform. Picture: Reuters

Donal O'Donovan and Colm Kelpie

Taoiseach Leo Varadkar said Ireland would stand firm against any moves by Brussels to interfere in tax policy.

It comes as the European Commission reportedly wants to proceed with an overhaul of taxes on digital firms, even if the rest of the world won't follow suit.

The Government has consistently rejected such moves. Despite that - and rules that say EU tax changes cannot go ahead without the support of all member states - the Commission is pushing to tap more revenues from online multinationals such as Amazon and Facebook.

But at a dinner hosted by business lobby group Ibec, Mr Varadkar said: "We are determined to protect our national tax policy and will oppose any moves on corporate tax consolidation or turnover taxes on digital companies.

"We also remain committed to the OECD-led process on tax transparency. Ireland is not and will never be a tax haven."

A draft report from the European Commission, which could be adopted as policy, said older bricks-and-mortar multinationals pay twice the tax in the EU that their digital competitors do.

But Finance Minister Paschal Donohoe repeated on Wednesday that taxing the digital sector should be examined at OECD, not EU, level.

The EU's preferred option would be for an agreement on this at OECD level.

But the EU "must prepare to act in the absence of adequate global progress", according to European Commission Vice President Valdis Dombrovskis, saying that a legislative proposal may come next spring.

Read More: EU 'will never allow Ireland to suffer from UK's decision to leave'

Such a move is likely to upset Washington and other rich nations that are home to many global tech giants.

It comes just a week after European Commission President Jean-Claude Juncker said he wanted the Common Consolidated Corporate Tax Base (CCCTB) plan pushed through without requiring the agreement of all member states and wanted it implemented via qualified majority voting rather than unanimous agreement.

Meanwhile, Mr Varadkar said the Government must balance necessary public capital investment with prudent fiscal policy.

He said that where there is scope in the Budget, it will be used to reward work and enterprise, and will benefit those on middle incomes and those "who pay the highest rates of tax far too soon".

"High taxes that take away 49pc of the overtime you do, the extra hours you work, or the pay increase you earned are a barrier to opportunity and to work. They are a cap on aspiration and there should be no cap on aspiration in the Ireland we wish to build," added the Taoiseach.

Irish Independent

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