EU propose shared corporation tax by September

Mr.Nice Guy

Apologies if this has already been mentioned but I feel it merits a discussion if it hasn't been...

EU proposals for shared corporation tax by September

The European Commission will present a first set of tax proposals as early as September that will, in time, allow any group of EU governments to share corporation taxes, according to international tax planners and consultancies in Brussels and London.

The commission's tax and customs commissioner, Laszlo Kovacs, will in September publish the tax plans for manufactured goods, described by international tax experts as "the single largest threat" to Ireland's prosperity, by which countries can agree to share profits under a Common Consolidated Corporate Tax Base (CCCTB).

The commission is likely to publish a second set of proposals, in December, setting out a method for countries to agree to share corporate taxes levied on the profits of financial services, according to consultants in Brussels.

Experts said the new tax proposals will be published despite comments made last week by Christine Lagarde, France's finance minister, that France will not fast track a CCCTB during its EU presidency that starts next month. Her comments were seen as a concession to Irish voters following their rejection of the Lisbon treaty.

"It remains the single largest threat to Ireland's beneficial tax regime. If CCCTB came in it would almost certainly have an adverse impact on Ireland," said Miles Walton, a tax partner at Allen & Overy in London.

"Every indication we have is that the CCCTB proposals are coming despite Lagade's comments," said Conor Foley of Hume Brophy, a Brussels-based consultancy. Foley said it was unclear why the commission wanted to publish separately a CCCTB plan for financial services but that it was likely to be designed to broaden its appeal to countries traditionally opposed to common tax plans, such as Britain.

Ireland, and other countries that want to continue with the current standalone corporation tax policies – including Poland, most Baltic states and Cyprus – oppose a CCCTB by which member states share corporate profits based on where the company is actively conducting business, rather than by the location of the registered company as is mainly used at present.

Walton said the Irish No vote may slow the process toward the adoption of CCCTB but he thought it would eventually be adopted. "I can see why the Irish will be implacably opposed, forever... The EU will have to get the approval of Britain and have some alternative proposals that will be acceptable," he said.

http://www.tribune.ie/archive/article/2008/jun/22/eu-proposals-for-shared-corporation-tax-by-septemb/

Thoughts?

latenia

It must be untrue because, as we all know, there is absolutely no threat to our tax regime from Europe and anyone who says otherwise is a CIA-funded crank or a Marxist terrorist.

sink

latenia wrote: »

It must be untrue because, as we all know, there is absolutely no threat to our tax regime from Europe and anyone who says otherwise is a CIA-funded crank or a Marxist terrorist.

Actally most people who voted yes including me aknowlege that there is a threat from some EU countries but Lisbon has absolutely no effect in this area. So using it as an argument against Lisbon is wrong as a CCCTB is just as likely to happen under Nice as Lisbon. It is a long way from becoming a reality in any regard.

seamus

Looks like they know for a fact that it can never be applied EU-wide, so instead they go for an opt-in system where a country can choose to get involved or not. Exactly like the Euro.

Basically, some of the larger countries who already have massive corporation tax, will share the proceeds of their taxes between those who have opted in. The rest of us can do what we want.

Ireland isn't the only country in the EU to have low corporation tax, so this is one area where unanimity will never be obtained, or at least won't be obtained for a long, long time. This proposal is really the only viable alternative for France and the others.

Canada J Soup

latenia wrote: »

It must be untrue because, as we all know, there is absolutely no threat to our tax regime from Europe and anyone who says otherwise is a CIA-funded crank or a Marxist terrorist.

Or doesn't understand the concepts of 'unanimity' or 'optional'. Or has another agenda that they know wouldn't gain a great deal of traction with the Irish electorate and prefers scare-mongering disinformation to honest discourse.

marco_polo

I though all this was on hold for the forseeable future.

http://www.tax-news.com/asp/story/France_Puts_Common_Tax_Base_Plans_On_Hold_Following_Irish_Vote_xxxx31404.html

Either way it demonstrates that this was not an issue that had anything to do with Lisbon.

molloyjh

latenia wrote: »

It must be untrue because, as we all know, there is absolutely no threat to our tax regime from Europe and anyone who says otherwise is a CIA-funded crank or a Marxist terrorist.

There isn't, and would not have been in Lisbon either, as all direct taxation matters are subject to unanimity and therefore we can veto any moves in this direction. As can the UK (who want to block it for sovereignty reasons) and a number of Eastern European countries, and Sweden too if memory serves.

baztard

molloyjh wrote: »

There isn't, and would not have been in Lisbon either, as all direct taxation matters are subject to unanimity and therefore we can veto any moves in this direction. As can the UK (who want to block it for sovereignty reasons) and a number of Eastern European countries, and Sweden too if memory serves.

I'm not so convinced about the power of our veto's anymore, especially when it comes to something very important to the big countries of the EU (ie. Lisbon, tax harmonisation). We veto'd the Lisbon treaty, yet by the looks of things we're being forced to un-veto it. Who's to say that if we're the only country, or one of a small group of countries opposed to tax harmonisation, that the big countries wont pressure us into it. Could there be a scenario of 'Join tax harmonisation or leave the EU' sometime in the future?

For the first time since we joined the EU, we now pose a threat to the big countries. Our low corporation tax is attracting a lot of business our way, and I get the impression they don't like it one bit (especially Sarkozy).

I wouldn't be overly confident on Britains unwillingness to have tax harmonisation. I dont think it a certainty for them to stay this way. There is a lot of talk of un-satisfaction amongst large companies there about they're high corporation tax. A good few of them have moved to Ireland for this very reason. An EU wide tax harmonisation in whatever form it takes, would not give British companies any incentive to have to move anywhere else.

molloyjh

baztard wrote: »

I'm not so convinced about the power of our veto's anymore, especially when it comes to something very important to the big countries of the EU (ie. Lisbon, tax harmonisation). We veto'd the Lisbon treaty, yet by the looks of things we're being forced to un-veto it. Who's to say that if we're the only country, or one of a small group of countries opposed to tax harmonisation, that the big countries wont pressure us into it. Could there be a scenario of 'Join tax harmonisation or leave the EU' sometime in the future?

For the first time since we joined the EU, we now pose a threat to the big countries. Our low corporation tax is attracting a lot of business our way, and I get the impression they don't like it one bit (especially Sarkozy).

I wouldn't be overly confident on Britains unwillingness to have tax harmonisation. I dont think it a certainty for them to stay this way. There is a lot of talk of un-satisfaction amongst large companies there about they're high corporation tax. A good few of them have moved to Ireland for this very reason. An EU wide tax harmonisation in whatever form it takes, would not give British companies any incentive to have to move anywhere else.

I think Lisbon is a very different situation. The EU leaders (including our own) believe this is for our benefit. They also believe that these changes need to happen and that this is the best deal that can be achieved. If it is not ratified then the EU is left in a bind as to where to go next. Also we are the only country (so far) that has refused to ratified the Treaty. With corporation tax it is not beneficial for everyone, and is certainly not a key issue as to the success of the Union. Additionally there are several member states besides ourselves that do not want to see CCCTB passed. Remember the French have been after this for years and have gotten nowhere.

The reaction to our No vote to Lisbon is due to the fact that it has put the future direction of the EU in serious doubt. It was (in the eyes of EU leaders) the best they could do. It was kind of an "Oh sh!t, what do we do now" thing. CCCTB isn't as fundamental or crucial to the EU and so the same reaction will not (or at least should not) occur.

Rb

seamus wrote: »

Looks like they know for a fact that it can never be applied EU-wide, so instead they go for an opt-in system where a country can choose to get involved or not. Exactly like the Euro.

Basically, some of the larger countries who already have massive corporation tax, will share the proceeds of their taxes between those who have opted in. The rest of us can do what we want.

Ireland isn't the only country in the EU to have low corporation tax, so this is one area where unanimity will never be obtained, or at least won't be obtained for a long, long time. This proposal is really the only viable alternative for France and the others.

They say that now but look at how they reacted to us not opting in on the Lisbon Treaty...

seamus

Rb wrote: »

They say that now but look at how they reacted to us not opting in on the Lisbon Treaty...

Yeah, they asked us to re-examine it.

They can also ask us to re-examine the veto all they like. Fact is, whatever Irish government actually goes with tax harmonisation won't last much longer in government. And we wouldn't be the only country who'd veto it, so the, "you're ruining it for everyone" cries wouldn't exist.

The fallacy here is that some people seem to think that the EU is a bulldozer driven by the French and the Germans, determined to make us do what they want. It's not us -v- them. It's a *union*.

Unfortunately, the French are in the presidency at the moment, so for the next six months it's going to sound like the French are running the show, even though they're not. Hopefully, the next presidency will be held by a country who don't sound like arrogant assholes.

djpbarry

Rb wrote: »

They say that now but look at how they reacted to us not opting in on the Lisbon Treaty...

Yeah, every nuke in Europe is pointed at us :rolleyes:.

marco_polo

baztard wrote: »

I'm not so convinced about the power of our veto's anymore, especially when it comes to something very important to the big countries of the EU (ie. Lisbon, tax harmonisation). We veto'd the Lisbon treaty, yet by the looks of things we're being forced to un-veto it. Who's to say that if we're the only country, or one of a small group of countries opposed to tax harmonisation, that the big countries wont pressure us into it. Could there be a scenario of 'Join tax harmonisation or leave the EU' sometime in the future?

For the first time since we joined the EU, we now pose a threat to the big countries. Our low corporation tax is attracting a lot of business our way, and I get the impression they don't like it one bit (especially Sarkozy).

I wouldn't be overly confident on Britains unwillingness to have tax harmonisation. I dont think it a certainty for them to stay this way. There is a lot of talk of un-satisfaction amongst large companies there about they're high corporation tax. A good few of them have moved to Ireland for this very reason. An EU wide tax harmonisation in whatever form it takes, would not give British companies any incentive to have to move anywhere else.

I am not of the opinion that two could be considered to be the same thing at all. Currently we are signed up to all the EU treaties up to and including Nice, under the terms of these agreements one of the things that all nations have is complete sovereignty over direct taxation policy. That is not something the the UK or many other member states would be ever willing to give up, and question of whether or not the any proposed EU change is better than their current system will not even be discussed.

It terms of the Lisbon treaty what we have is the right to not sign up to the terms of the treaty. Nobody not even the EU is going to force us to sign up to the terms of the treaty, and there is nothing to stopping us voting no to it a second time. Should that happen then the Lisbon Treaty in its current form would be dead, killed by us, because it cannot come into force without all 27 countries.

The point I and other are making is that in that scenario the EU will be a lonely club for Ireland, and what happens next would be anyones guess.

Rb wrote: »

They say that now but look at how they reacted to us not opting in on the Lisbon Treaty...

Were we forced to ratify it anyway?

Moriarty

Mr.Nice Guy wrote: »

Thoughts?

Indeed, what are your thoughts? What with it being in the rules that you provide an opinion when you post an article..