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Irish corp tax review by EU 6 months old

Friday, February 28 14:27:56

It is now six months since the European Commission said it was conducting a probe in to whether Ireland's corporate tax regime bestows an unfair advantage on Ireland with no indication that the "review" is near completion.

Last month, Fianna Fail's Michael McGrath wrote to Commission Vice President Joaquin Almunia warning of the risk the review poses to Ireland's international reputation.

In his reply, released by Fianna Fail this week, Almunia clarifies that, as there "have been allegations in the press about the special treatment of certain companies in Ireland," the Commission is obliged to "gather all necessary information to either rebut or confirm such claims. Up until now, the Commission has not yet formed a view on the matter, and has not initiated a formal investigation."

Almunia said: "It is the Commission's duty to make sure that measures by tax administrations in any member state do not result in an unfair advantage to certain companies, as this distorts competition in the common market."

He reassures McGrath, however, that, while the Commission is "concerned about the possible discrimination between companies, tax rulings issued by national administrations would only constitute state aid, and be subject to state aid rules, if rulings provide for a selective advantage to certain companies."

According to McGrath, the letter demonstrates that "the Commission is not alleging that Ireland is a tax haven." However, McGrath said, as the outcome of the review will be vital to Ireland's economic interests, the Government should pressure for the investigation to be completed swiftly, "so as to address any suspicion concerning how the Irish corporation tax system deals with individual multinational companies."