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Back Door on Corporation Tax

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  • 04-06-2008 12:33pm
    #1
    molloyjh
    Registered Users Posts: 24,745 ✭✭✭✭


    Hi all,

    just windering if anyone can fill me in on this whole "back door" to changing corporation tax. I've heard it mentioned a few times but know nothing about it. I was of the opinion that all matters of taxation are still subject to unanimous decision. So what is it and is it a scare tactic, or a genuine issue?

    Thanks...


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    #2
    sink
    Registered Users Posts: 4,314 ✭✭✭sink


    There is no back door for a common corporate tax rate to be introduced. The introduction would require a referendum in this country. The no camp has envisioned two scenarios whereby a cctb could be forced on us, both are fatally flawed.

    The first scenario envisions a ECJ ruling that our low taxes are a distortion of competition. This is flawed because the ECJ has no jurisdiction over direct taxation. The entire premise that the ECJ could rule on corporate taxes is based on some ridiculous notion that the ECJ could rule that corporate tax is an indirect tax such as VAT. That would be like ruling a articulated truck is a skateboard and is completely ludicrous.

    The second scenario is to do with the new enhanced co-operation rules. Under these new rules 8 or more member states can co-operate in areas which the rest of the Union wishes to stay out of. This means that France, German and six other countries could harmonise taxes between them if they so wished. The no camp argues that these countries could but pressure on our government to join and eventually we will be forced into it. They completely ignore the fact that a referendum would legally be required for us to enter into such an agreement and wouldn't have a snowballs chance in hell of passing.


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    #3
    molloyjh
    Registered Users Posts: 24,745 ✭✭✭✭molloyjh


    Cheers sink.....it all sounded dubious to me alright but hadn't heard much detail on it. I'm really getting fed up with the No campaigners scare-mongering. The poster with the Declaration of Independance and the "People died for your freedom" line in particular I find wholly ridiculous, melodramatic and even a bit offensive. All I want is some reasonable and accurate points from both sides so that I can judge who has the better case and that seems all but impossible.....


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    #4
    LostinBlanch
    Registered Users Posts: 2,908 ✭✭✭LostinBlanch


    Sink, you ignore the fact that the Comission will be doing their utmost to make sure that there is corporate tax harmonisation throughout the EU.

    I dont share your trust that it will not happen, and the scenario where groups of countries, under enhanced co-operation, can take distortion of competition action against Ireland (or other states) sounds too plausible to me.

    And of course when things go to court, anything can happen.


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    #5
    sink
    Registered Users Posts: 4,314 ✭✭✭sink


    LostinBlanch wrote: »
    Sink, you ignore the fact that the Comission will be doing their utmost to make sure that there is corporate tax harmonisation throughout the EU.

    The commission can make recommendation and put forward legislation all they want it dosn't change the fact that cctb would first require a referendum in this country.
    LostinBlanch wrote: »
    I dont share your trust that it will not happen, and the scenario where groups of countries, under enhanced co-operation, can take distortion of competition action against Ireland (or other states) sounds too plausible to me.

    You ignore the fact that the ECJ has no jurisdiction over direct taxes. It would be like the America supreme court ruling on our taxes. It won't happen and to say it's possible is pure fantasy.
    LostinBlanch wrote: »
    And of course when things go to court, anything can happen.

    Courts can only interpret legislation. The legislation is 100% cristal clear that the court has no jusridiction over direct taxes. To interpret otherwise would be like saying black is white and yes means no. If it ever gets to that stage I think it would be time for Ireland to leave.


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