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Irish Opposition Questions EU On Corporate Tax Probe

by Jason Gorringe,, London

03 March 2014

Ireland's Fianna Fáil party has expressed its concern over the "seemingly snail's pace" progress being made by the European Commission in its preliminary probe of the country's corporate tax regime.

Fianna Fáil finance spokesperson Michael McGrath said: "News of the preliminary probe by the European Commission into the corporation tax regime of Ireland [and] a number of other countries was confirmed last September. It is a matter of grave concern that, six months on, the European Commission is still at the stage of 'gathering information' and that no timescale has been provided for the conclusion of the probe."

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

In his reply, released by Fianna Fáil 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."

TAGS: compliance | Finance | tax | European Commission | tax compliance | Ireland | tax avoidance | tax incentives | revenue guidance | corporation tax | tax authority | tax planning | tax rates | tax breaks | revenue statistics | tax reform | European Union (EU) | Europe | Tax | Tax Evasion

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