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Moscovici Calls For Irish Support For CCCTB Proposal

by Jason Gorringe, Tax-News.com, London

28 October 2016


European Tax Commissioner Pierre Moscovici has said he hopes there can be a "serene, constructive" discussion with the Irish Government on proposals for the relaunch of a common consolidated corporate tax base (CCCTB) initiative.

The European Commission published its latest proposals on October 25. It intends first to introduce harmonized rules on the calculation of a company's tax base in all member states. After that, tax revenues would be collected and distributed among member states under a formulary apportionment approach, whereby revenues would be allocated based on factors such as turnover, sales, and employment levels.

In an interview with the Irish Examiner, Moscovici said: "I understand the sensitivity of the Irish Government but I think that we need to discuss that in a smooth way, a serene way, a constructive way. Ireland has made considerable progress towards a tax governance which is more transparent and tried to move away from a previous reputation, and is really in the right place."

According to the Commission, the CCCTB would eliminate mismatches between national systems and preferential corporate tax regimes, and the formulary apportionment approach would remove the need for transfer pricing rules for related-party dealings within the EU.

Moscovici stressed that the Commission has no intention of damaging the attractiveness or the competitiveness of any country. "My commitments to the Irish Government and to [Finance Minister] Michael Noonan are very clear and I repeat that, again, this proposal aims for more clarity, more transparency, more efficiency, more fairness," he said.

"What we want to do is create a framework which prevents future Apple cases, and it's in the interest of all countries, including Ireland, to go in that direction," Moscovici added.

In August, the Commission concluded that two tax rulings issued by Ireland to Apple enabled the company to pay an effective corporate tax rate of one percent on its European profits in 2003, and a rate of 0.005 percent in 2014. It ordered Ireland to recoup EUR13bn (USD14.2bn), plus interest, from Apple.

TAGS: tax | European Commission | Ireland | interest | corporation tax | multinationals | transfer pricing | tax rates | tax reform | European Union (EU) | Europe | BEPS

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