The so called ‘turnover tax’ for internet based companies to be proposed by the French Finance Minister at an informal Ecofin meeting in Estonia today represents another attempt by the EU to take power off member states in the area of corporate tax and should be rejected in the strongest possible way by Minister Paschal Donohoe.
Deputy McGrath commented, “The plans being brought forward by the French Finance Minister Bruno Le Maire have a number of characteristics similar to the CCCTB proposals being promoted by the European Commission and undoubtedly would, if implemented, represent a loss of sovereignty for member states over corporate tax.
“Any proposal that involves distributing turnover across member states for taxation purposes will inevitably result in the larger member states doing better with small member states, like Ireland, losing out.
“Ireland would quite possibly be the single biggest loser if these proposals were adopted. It is no coincidence that large member states such as Germany, Spain and Italy are backing the French proposals.
“Minister Paschal Donohoe should reject the proposals being put forward and instead urge member states to focus on the reforms set out by the OECD as part of the BEPS process.
“Coming just days after European Commission President Juncker made it known his desire to remove the member state veto over CCCTB; this is a further attempt to erode the sovereignty of member states over corporate tax policy.
“Minister Donohoe needs to hold a firm line and reject these proposals,” concluded McGrath.