First published in the The Times, 26 October 2016.
Ireland’s ability to attract foreign direct investment could be seriously undermined by a major tax initiative announced by the EU Commission, experts have warned. The commission published proposals for a common consolidated corporate tax base (CCCTB), which aims to harmonise tax rules for multinationals across all 28 EU member states.
Tim Wach, the global managing director of Taxand, said that the latest proposal could find support among multinationals.
“It simplifies and reduces a company’s cost of cross-border compliance by implementing a single method for calculating taxable profits across the EU and reduces the risk of inconsistent tax laws leading to double taxation. Ireland could encounter difficulties if the initiative gains momentum among other member states. The proposals will demand the support of all 28 countries, or possibly 27 with the UK’s imminent plans to trigger Article 50. However, with the UK’s reduced influence and leverage within the EU following the Brexit vote, Ireland may be left out in the cold, alone and politically isolated in resistance to the proposals.”
Sceptics will eye the proposals with the usual disdain, but the removal of the UK’s leverage in these negotiations may be the approval tipping point.