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Tax Trojan Horse

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  • 07-06-2008 11:22am
    #1
    Vinegar Hill
    Registered Users Posts: 180 ✭✭


    The story says it all. Irelands low corporation tax is soon to be a thing of the past. Who am I to argue with the experts?
    The Irish Independent has seen copies of the agenda prepared for the July 2 meeting of the European Commission's 'Competitiveness Council'. It shows the plans have now developed to the point that Laszlo Kovacs, the EU Commissioner for Taxation and Customs Union, and the main driver of the tax harmonisation plans, was due to give a presentation on the subject to the Council.
    A Commission spokesman confirmed that the item has been removed from the latest edition of the agenda. One source said it was specifically taken off because of sensitivities over the Irish poll on the treaty.

    The full article can be read here.

    http://www.independent.ie/national-news/fears-as-french-to-push-for-taxrate-harmony-1401314.html

    or here.

    http://corporatetax.blogspot.com/

    The articles also explain how Ireland's veto will be done away with so I am interested in your reactions.


Comments

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    #2
    axer
    Registered Users Posts: 5,517 ✭✭✭axer


    I think really what is missing from all this EU talk is - where is the EU headed? There does not seem to be a clear direction for where it is going.

    Is it going to keep heading in the direction of a federalist state?

    People say "not a chance - it wouldn't be accepted" but I think all it takes is to keep changing things slowly you just end up with a federal government.

    Yes we may veto tax changes all the way but is it just going to come in eventually because, like the government say about voting yes to lisbon, if we don't say yes then we will be on the fringes of europe i.e. we will have no allies because we don't play ball thus we will be left behind. Where do you draw the line?

    I think there is a lot of sneakiness of what is said and not said by europe at the moment so as to not to strenghten the "No" campaign. This is just another clear example. It may be just a presentation and we can veto any plans - but if the government have the above argument now regarding lisbon - how long will it be before they use the same argument about tax? Then they will put it to the Irish people, we will reject it (presumption). They will then make a few changes and put it to us again resulting in the tax half-way in the door. Next thing you know it is fully implemented.

    This does not inspire trust of europe in me.


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    #3
    sink
    Registered Users Posts: 4,314 ✭✭✭sink


    Look, the commission and the council can draw up as many plans as they like. It dosn't change the fact that such measures would require a referenda in Ireland. I don't ever see that passing so there is no risk for us. Other countries might go ahead with harmonisation but we don't have to be included.

    For the EU to become a federalist state with a central goverment which is directly elected three things first have to happen. 1. Proper Pan-European parties would have to form, this is happeneing but it's going to take another two decades to fully emerge. 2.English would have to be adopted as the lingua-franca for the whole EU, so people would know more about who they where voting for. This is also happeing, somthing like 89% of schoolchildren troughout the EU are being thought english. 3. Pan-European news media and culture would have have to be established. This will be aided by more sporting events like the rider cup where Europe competes as a whole. Once again this is happening but very slowly. I believe that once these requirements are filled Europe will be ready for a federalist state but it will take a generation or two, and it won't be us who decides it will be our kids and grandkids.


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    #4
    Vinegar Hill
    Registered Users Posts: 180 ✭✭Vinegar Hill


    These are just some of the facts listed in the second link. I would encourage everyone to read both links entirely.
    The Ten Steps to end Ireland Inc.:

    1 The EU Commission wants CCCTB, the majority of the member states want it, the Euro Parliament is in favour.

    2 There are enough states (min 9) to introduce CCCTB through enhanced cooperation.

    3 This 'Enhanced Cooperation' group decide among themselves that CCCTB will be paid according to sales destination.

    4 Bigger EU states within Enhanced Cooperation Group where goods are sold want to get money off Irish companies selling goods in their state.

    5 Irish politicians and Irish resident companies resist, saying we are not part of Enhanced Cooperation Group.

    6 The EU Court of Justice has long form on cases involving direct taxation - Bigger states refer dispute to the ECJ which decides that current tax system is causing 'a distortion in competition' - Irish resident companies must hand over money.

    7 Irish resident companies must hand over portion of corporate tax, not to Ireland but to 'Enhanced Cooperation' countries where goods are sold.

    8 Ireland's Corporate tax take decreases sharply, even though the Irish state retains its veto on Corporate Tax Rate.

    9 Ireland is forced to choose whether to live with less Corporate Tax take or to increase Corporate Tax rate.

    10 Ireland is forced, by powers outside its control, to 'voluntarily' increase the Corporate Tax rate. Veto is proved useless.
    A senior economist has said that if Ireland ratifies the Lisbon Treaty, the country's low level of corporation tax will be eliminated within a matter of years.

    The issue of the Corporation Tax rate and of a Common Consolidated Corporate Tax Base is absolutely crucial to Irish jobs. Having the power to maintain a low corporation tax rate is one of the linchpins of Irish economic success in recent years, and one of the reasons why Ireland has attracted such high levels of inward investment.


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


    Bigger EU states within Enhanced Cooperation Group where goods are sold want to get money off Irish companies selling goods in their state.

    There is no legal basis for this to happen. In fact it would be easy to argue it is illegal because it would be like putting up tariffs. Whoever wrote this article is talking out their arse.


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    #6
    Vinegar Hill
    Registered Users Posts: 180 ✭✭Vinegar Hill


    Well you can refer to them as such if you like. You can get their names in the articles.

    Does not change anything here though.


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    #7
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    The evil mastermind Kovacs did clarify his position quite recently, in a letter to Eamon Gilmore:

    "all proposals on tax matters will continue to be decided on the basis of unanimity; that no Member State of the Union can or could in the future be obliged to participate in any proposal for a set of rules governing a common consolidated corporate tax base; and that all Members States have, and will continue to have, a veto on matters affecting direct taxation".

    Commissioner Kovacs also confirms that the position of the Commission is that 'each and every Member State is free to choose the direct tax system that it considers most appropriate for its own requirements, provided they respect Community rules Community rules such as non-discrimination.

    Yes, that means that a group of EU countries can get together to agree a common tax rate, or common tax base, or anything else they like, because tax remains totally within the hands of national governments, who are therefore free to do as they like.

    What the enhanced cooperation proceudre cannot do, however, is be set up in such a way as to force other countries to join in - which is what you're suggesting. Nor can an enhanced cooperation group be set up in the first place without unanimous agreement. Nor can the ECJ rule on direct taxes, which are not a competence of the EU.

    Someone is being a fool here - either you (since those are presumably your 'ten steps' you've cited), or IBEC. An IBEC-versus-internet-blogger credibility contest...you see my problem?


    cordially,
    Scofflaw


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    #8
    Vinegar Hill
    Registered Users Posts: 180 ✭✭Vinegar Hill


    and does it die with the veto? or does it go to the ECJ? ;)


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    #9
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    Vinegar Hill wrote: »
    and does it die with the veto? or does it go to the ECJ? ;)

    Can you think of a case where the ECJ overturned the use of an EU veto?

    cordially,
    Scofflaw


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    #10
    Vinegar Hill
    Registered Users Posts: 180 ✭✭Vinegar Hill


    This from the article as well....

    The Court of Justice (ECJ) is based in Luxembourg.
    Its job is to make sure that EU legislation is interpreted and applied in the same way in all EU countries.
    The Court also makes sure that EU member states and institutions do what the law requires. The Court has the power to settle legal disputes between EU member states, EU institutions, businesses and individuals.

    The European Court of Justice has a long history of making and enforcing decisions about direct taxation including Corporation Tax.
    See Tax Lawyer Loyens and Loeff newsletter under direct taxation.


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    #11
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    Vinegar Hill wrote: »
    This from the article as well....

    Well, let's have a look at that "history of making and enforcing decisions about direct taxation" via the link you cite, shall we? It looks like a lot of stuff, but how much of it is relevant? Many mentions of corporation tax, perhaps?

    * Advocate General concludes German levy of corporate income tax on dividend distributions in principle compatible with EC law (Burda)
    o ECJ decides corporate income taxation of non-German foundations incompatible with EC law (Stauffer)
    o Gibraltar corporation Tax Reform declared incompatible with the Common Market


    There you go - the ECJ decisions on corporate taxation as per the impressive-looking link Vinegar Hill cited.

    cordially,
    Scofflaw


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    #12
    sink
    Registered Users Posts: 4,314 ✭✭✭sink


    Just in case you're wondering what that means. They ruled against a german move to tax business that were not german, disproving that 10 step nonscence you posted earlier.


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    #13
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    sink wrote: »
    Just in case you're wondering what that means. They ruled against a german move to tax business that were not german, disproving that 10 step nonscence you posted earlier.

    Oh dear! So when people say the ECJ has intervened in corporate tax matters, they're rather failing to mention that it has done so in a direction that opposes the 'what-if' CCCTB enhanced cooperation scenario?

    Shocking. Who knew?

    shocked...shocked I tell you...
    Scofflaw


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    #14
    Vinegar Hill
    Registered Users Posts: 180 ✭✭Vinegar Hill


    I guess we shall see at the end of the month. That is when they meet (after the Irish vote).


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    #15
    sink
    Registered Users Posts: 4,314 ✭✭✭sink


    I all so be on the look out for flying pigs.


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    #16
    Benfatto
    Closed Accounts Posts: 20 ✭Benfatto


    uniform taxes and an end to bank secrecy are a mayor drive for the EU's key politicians for creating this Lisbon treaty.
    Only question is how long it will take them

    As for corporate taxes, it will be interesting. The plans are there but so is the opposition between member states at this point. The Lisbon treaty will certainly ease the way, as it can give the commission the power to decide on corporate tax issues (after some paperwork of course) I expect it to be initiated by 2011, maybe earlier.

    Cyprus will probably bail out when it comes to it, people are furious already about what the EU is doing to their country. Czech Republic might leave the EU too, and the next elections in the UK will be very interesting.


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    #17
    sink
    Registered Users Posts: 4,314 ✭✭✭sink


    Oh look there are those flying pigs I was talking about.


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    #18
    BMH
    Closed Accounts Posts: 804 ✭✭✭BMH


    The EU will have the power to enslave us (after some paper work of course) and from by calculations this will happen around 5 o'clock, 17th May, 2012. Everyone's opposed to it but it's only a matter of time really.


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    #19
    Benfatto
    Closed Accounts Posts: 20 ✭Benfatto


    sink wrote: »
    Oh look there are those flying pigs I was talking about.

    My friend, studying taxation is my job. You don't have to believe me for it but don't make yourself look like a fool. Do some research before you judge.

    By the way, did you know Turkey will also join EU in a few years?


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    #20
    sink
    Registered Users Posts: 4,314 ✭✭✭sink


    Benfatto wrote: »
    My friend, studying taxation is my job. You don't have to believe me for it but don't make yourself look like a fool. Do some research before you judge.

    Read some of the other threads on this topic that I have been partaking in.
    http://www.boards.ie/vbulletin/showthread.php?t=2055292398
    http://www.boards.ie/vbulletin/showthread.php?t=2055306697
    http://www.boards.ie/vbulletin/showthread.php?t=2055295928

    You plainly need more education, unless you can somehow explain how tax harmonisation could possibly be introduced without a referendum. No way would I hire you.
    Benfatto wrote: »
    By the way, did you know Turkey will also join EU in a few years?

    I already started a thread on Turkey joining the EU.
    http://www.boards.ie/vbulletin/showthread.php?t=2055293444

    You're welcome to join if you have anything constructive to contribute.


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    #21
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    BMH wrote: »
    The EU will have the power to enslave us (after some paper work of course) and from by calculations this will happen around 5 o'clock, 17th May, 2012. Everyone's opposed to it but it's only a matter of time really.

    Oh we're not all opposed. After all, that's real democracy, if you think about it.

    cordially,
    Scofflaw


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