Molly Scott Cato MEP, a member of the European Parliament’s special committee on tax, has claimed that a surge in corporate tax receipts in Ireland is a reward for poor tax practice. She said:

“Although the 10% increase in tax receipts from corporations is unexplained it seems likely that it is the result of corporations who based themselves in the Irish Republic as a result of its dubious tax rules. Tighter rules and public disgust at corporate tax avoidance have meant these same corporations have now amended their practices. But it is entirely wrong that the governments who lured corporations to their shores with sweetheart deals should now be the beneficiaries of increased tax yields.”

Dr Scott Cato, who is also Green Party finance speaker, added:

“Schemes such as the notorious ‘Double Irish‘ have meant the loss of millions to the public exchequer across the EU in recent years and the Irish government’s 12.5% tax rate has been an important part of the race to the bottom in corporate tax regimes. While it is encouraging to see that political action against corporate tax avoidance, which Greens have been championing in Europe, is effective, it would be entirely wrong if the governments that designed sweetheart deals were the main beneficiaries.”

Molly Scott Cato and fellow Greens have argued that fines imposed on member states whose tax rulings have been deemed unlawful should have to repay the additional tax that they received as a result of these rulings. A proposal by Greens in the European Parliament to this effect, was voted through by MEPs in December [1].

Notes

[1] Green amendment 411 to Dodds Niedermayer Report on Bringing transparency, coordination and convergence to Corporate Tax policies in the Union and supported by majority of MEPs: ‘Assessing the possibility of modifying the existing rules in order to allow the amounts recovered following an infringement of Union state aid rules to be allocated preferably to the Union budget or returned to the Member States which have suffered from an erosion of their tax bases, and not to the Member State which granted the illegal tax-related aid, as is currently the case.’

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