“MEPs have sent a message to the Irish government that there needs to be enhanced cooperation or unilateral implementation of the OECD agreement on minimum taxation of companies”, an EU source told EUROPE on Wednesday 21 September, following a mission to Ireland by a delegation from the European Parliament’s Subcommittee on Tax Matters (FISC) on Monday 19 and Tuesday 20 September.
This source explained that Ireland is not in favour of these measures, as it does not wish to circumvent the EU treaty hurdle of unanimity in tax matters. The five largest economies in the euro area - Germany, France, Italy, Spain and the Netherlands - issued a joint statement explaining that they wanted to overcome the blockage by one of these means. The Czech Finance Minister, Zbyněk Stanjura, wanted a delay at the informal meeting in Prague in September, saying there was still time to find a solution that would allow for a unanimous agreement in the Council of the European Union (see EUROPE 13018/8).
MEPs had condemned countries that abuse their vetoes in the Council of the European Union on tax issues and called for a rapid implementation of the agreement (see EUROPE 12988/6).
The delegation, led by subcommittee’s chair, Paul Tang (S&D, Dutch), met with representatives of key institutions, such as the Department of Finance, the Revenue Commissioners, the Irish Parliament’s Finance and Budgetary Control Committees (Oirechtas), as well as private sector stakeholders, including Apple, Google, Microsoft and Meta (Facebook), experts and academics, civil society organisations and the media.
According to our source, the meeting with GAFAM was “tense” because the digital giants do not recognise Ireland as a tax haven. Its regulations do not provide for taxation on patent applications. GAFAM also confirmed that they are not interested in implementing the country-by-country reporting directive or CBCRD (see EUROPE 12968/3), which has been approved at EU level but not yet implemented at national level.
“Ireland is still a firm believer in its tax system and has no plans to review it in the medium term. It’s unfortunate, when you see that Ireland’s tax revenues are based on the presence on its territory of ten multinationals”, one of the members of the delegation, Claude Gruffat (Greens/EFA, French), told EUROPE.
“Such a concentration poses significant risks of a collapse of the system. It is high time that Ireland realised the harmful effects of tax competition and the race to the bottom that it brings”, he added.
The parliamentary delegation also referred to the Recovery and Resilience Facility (RFF) for Ireland. As part of its national stimulus package, the Irish government has committed to a tax reform implementing a withholding tax on the flow of royalties. Although a public consultation is currently open in Ireland, the Irish government does not seem to be in a hurry, according to our source.
“Ireland must remain committed to fighting harmful tax practices and cooperate with other countries to prevent new schemes from arising. The heavy reliance on revenues from a few multinational companies is not sustainable and Ireland needs to engage in a long-term process to broaden its tax base“, Mr Tang said in a statement. (Original version in French by Anne Damiani)