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Noose tightens around Ireland on tax

Tuesday, February 11 12:16:36

Ireland's corporate tax regime came under renewed threat today with the EU's anti-trust chief pledging a crackdown on "creative" tax schemes for multinationals.

The news comes just days after the Taoiseach was forced to once again defend Ireland's tax policies at an OECD meeting following Yahoo's decision to move European operations to Dublin and after a Trinity College Dublin professor today claimed that US multinational operating here pay an effective tax rate of just 2.2pc.

The European Union's antitrust chief, Joaquin Almunia, said today he was looking into unfair tax regimes by some European governments and whether these qualified as illegal state aid.

His comments came amid a continuing row in Europe over how legal loopholes and low corporate tax in some countries allow large firms, such as Google and Apple to shrink their tax bill.

Mr. Almunia said he had sent out a number of requests for information to those countries where there were "doubts" about the legal framework for taxation.

Speaking at a conference in Brussels, Mr. Almunia warned that "aggressive tax planning" ran counter to the principles of the EU's Single Market.

"In those cases where national laws or tax-administration decisions permit or encourage these practices, there might be a state aid component involved and I intend to go to the bottom of it," he said.

"A limited number of companies actually manage to avoid paying their proper share of taxes by reaching out to certain countries and shifting their profits there."

In particular, he singled out digital, creative, and other industries based on intellectual property, where it was easier for firms to "push activities from one country to another and take advantage of the gaps that exist within the EU."

Mr. Almunia didn't specify the names of particular businesses, but the commission is understood to have requested information from Ireland, the Netherlands and Luxembourg as well as some multinationals.