Irish MEP Brian Hayes hit out at the EU over the controversial plans, saying any attempt to “harmonise” corporate tax across the bloc would “hammer” Ireland and other smaller member states.
The MEP for Dublin warned Brussels was attempting to harmonise taxes across the union “through the back door” with their Common Consolidated Corporate Tax Base (CCCTB) proposal.
He said it unfairly targeted smaller EU countries like Ireland, who adjust their corporate tax rates in order to attract multinational businesses, providing essential investment and jobs.
And he issued a dire warning to the bloc, setting out his position in no uncertain terms: “We have a veto here and we should not be afraid to use it.”
He wrote on his blog: “The CCCTB is effectively the EU’s attempt to harmonise corporation tax rates through the back door, creating a common system for taxing large companies across Europe, and sharing out the corporate tax revenues between Member States.
“But in all this, it is the large Member States have the most to gain and the small Member States, particularly Ireland, that have most to lose.
“It is in Ireland where multinationals devote their investment in research, development and innovation and where the profit is generated.”
The CCCTB proposes “siphoning” off taxable profits from countries including Ireland where companies carry out research and development and passing it on to other countries where the organisation, for example, advertises.
Mr Hayes said “countries with bigger populations will clearly be the winners here” and slated the tax-grab as “the great EU corporate tax lie”.
He concluded: “It is disingenuous to suggest that CCCTB will do anything to curb tax avoidance. Many tax experts have even said that CCCTB could open Europe up to more tax loopholes and create more tax mismatches with non-EU countries.”
And in a final warning which is sure to set alarm bells ringing in Brussels,
Dublin has been growing increasingly close during Brexit talks, Mr Hayes said: “We have a veto here and we should not be afraid to use it.”
The EU said: “With the CCCTB, cross-border companies will only have to comply with one, single EU system for computing their taxable income, rather than many different national rulebooks.
“Companies can file one tax return for all of their EU activities, and offset losses in one Member State against profits in another.
“The consolidated taxable profits will be shared between the Member States in which the group is active, using an apportionment formula. Each Member State will then tax its share of the profits at its own national tax rate.”