Belfast Telegraph

MEPs call for doubling of Irish corporation tax

Ireland's low corporate tax level of 12.5% should be doubled to 25% as part of a common rate across Europe, a cross-party group of MEPs has said.

They tabled a motion in Strasbourg demanding progress towards a single rate of corporate tax "considering that European taxpayers and citizens have to take a major risk in order to stabilise a financial system which has been profiting from the exceptionally low Irish corporation tax rate of 12.5%".

But in a four-year plan announced yesterday, the Republic said its corporate tax would remain at 12.5%.

One of the signatories, German Green MEP Sven Giegold, said: "Introducing a common corporate tax rate in Europe is the only way to limit tax competition and the damaging effects this has had on the European economy and European solidarity.

"Today's declaration is a welcome development, which represents the first time that such a broad political alliance in the European Parliament has thrown its weight behind a clearly defined common corporate tax rate."

He added: "Tax competition within the EU and the Eurozone enables cross- border businesses to avoid over €100bn in tax payments, notably by repatriating profits to jurisdictions with lower corporate tax rates.

"This not only undermines the spirit of the common market, it is grossly unfair and diminishes revenues in other member states. It is particularly odious that financial institutions, which have unfairly profited from this tax competition and thereby avoided their responsibilities to their national exchequers, should now be bailed out by the same public coffers."

Mr Giegold added: "Ireland will clearly need support in the painful reconstruction of its economy following the crisis. However, it is not acceptable that this support should be used to rebuild an economy based on tax dumping."

The declaration, backed by MEPs from centre-left and centre-right, the Liberals and Greens, said a common corporate tax rate needed to be agreed swiftly "in a spirit of solidarity", bearing in mind that the Irish government had sought EU financial funding.

It said: "Solidarity is a fundamental principle of the European Union, as set out in the treaties, and support for Ireland is therefore consistent with European values."