Article 116 of the Lisbon Treaty could be used to end low Irish corporate tax rates. Entrepreneurs to substitute for multinational investment?

Patslatt1

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Article 116 of the Lisbon Treaty could be used to end low Irish corporate tax rates. Entrepreneurs to substitute for multinational investment?

In debates about voting for the Lisbon Treaty, article 116 Article 116 was barely mentioned and the sovereignty of EU states over taxation was supposedly unchanged. Yet Article 116 basically only requires a vote of the European Parliament to challenge taxation that allegedly distorts markets.

Yesterday in an interview on Pat Kenny's Newstalk show, a europhile observer said that times move on and,as if sovereignty over taxation were trivial, he expected Ireland to cave in to pressure from France and Germany on our low corporate tax rate now that support for our position from UK is gone with Brexit. Kenny thought that small countries would back us. But most of them don't need low corporate tax rates given the competitive advantage of extremely low labour costs in central and eastern Europe and of indigeneous entrepreneurs and companies in western Europe.

The loss of control of corporate tax rates would be a major blow to national sovereignty and maybe a bridge too far towards a federal European state. It would also call for a thorough revision of Irish governmnt policies and strategies to compensate for the likely reduction in inward investment from multinationals.

An emphasis on encouraging indigeneous entrepreneurs and attracting foreign entrepreneurs would help. Increased government funding for venture capital in partnership with private companies, tax breaks and small grants for startups and offering residency to foreign investors who start businesses are proven measures internationally.

In addition,the education system needs to turn out more STEM graduates, which requires recruitment of more science and maths teachers in schools. To pay them competitively with pay in industry, many would have to be paid a premium over average teachers' pay. Trade union resistance would likely prevent that, however. Another barrier to entry is the prolonged two years postgraduate teachers' training degree for secondary teachers which was raised from one year to please unions.
 
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Catalpast

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In debates about voting for the Lisbon Treaty, article 116 Article 116 was barely mentioned and the sovereignty of EU states over taxation was supposedly unchanged. Yet Article 116 basically only requires a vote of the European Parliament to challenge taxation that allegedly distorts markets.

Yesterday in an interview on Pat Kenny's Newstalk show, a europhile observer said that times move on and,as if sovereignty over taxation were trivial, he expected Ireland to cave in to pressure from France and Germany on our low corporate tax rate now that support for our position from UK is gone with Brexit. Kenny thought that small countries would back us. But most of them don't need low corporate tax rates given the competitive advantage of extremely low labour costs in central and eastern Europe and of indigeneous entrepreneurs and companies in western Europe.

The loss of control of corporate tax rates would be a major blow to national sovereignty and maybe a bridge too far towards a federal European state. It would also call for a thorough revision of Irish governmnt policies and strategies to compensate for the likely reduction in inward investment from multinationals.

An emphasis on encouraging indigeneous entrepreneurs and attracting foreign entrepreneurs would help. Increased government funding for venture capital in partnership with private companies, tax breaks and small grants for startups and offering residency to foreign investors who start businesses are proven measures internationally.

In addition,the education system needs to turn out more STEM graduates, which requires recruitment of more science and maths teachers in schools. To pay them competitively with pay in industry, many would have to be paid a premium over average teachers' pay. Trade union resistance would likely prevent that, however. Another barrier to entry is the prolonged two years postgraduate teachers' training degree for secondary teachers which was raised from one year to please unions.
Inevitable ....

If we are relying on Brussels to back us over Brexit

- then will want a pound or 2 of our flesh

- in return....

I voted NO BTW
 

Northsideman

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Get used to it. We are small fry in the scheme of things and will as usual be the best boys in class and say and do as told. In 1916 a stand was made against an empire now we are in a bigger much more oppressive one and the likes of FF and SF are loving it, it's a crazy world indeed.
 
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FunkyBoogaloo

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I suppose, in theory, it could. However any proposals put forward must be adopted using the Ordinary Legislative Procedure... which means Ireland (at the Council of Ministers) can say NO at any point and such a proposal would fall.

I do remember corporation tax being discussed during Lisbon (not specifically Article 116 though) and here on p.ie too but it was debunked. Something about the EU not having competence over direct taxation and ECJ judgments etc on the broader matter.

I must look it up...
 
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Lumpy Talbot

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No
Always struck by the nature of political debate over Irish official corporate tax rates as something of a mythical debate seeing as no corporate pays anywhere approaching even the official low rate in Ireland and if they do they get it back in rebate form.

Mind you at least there is something of an equivalence across Europe and the US in that regard as none of the MSNs pay their official corporation tax rates either.

So what we have in terms of tax rates for corporates across Europe and the US is very much the sight of a group of multilingual bald men fighting over an entirely fictional comb.
 

Mick Mac

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Inevitable ....

If we are relying on Brussels to back us over Brexit

- then will want a pound or 2 of our flesh

- in return....

I voted NO BTW
They do have a tendency to ************************ one over in return.
 

Mick Mac

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Always struck by the nature of political debate over Irish official corporate tax rates as something of a mythical debate seeing as no corporate pays anywhere approaching even the official low rate in Ireland and if they do they get it back in rebate form.

Mind you at least there is something of an equivalence across Europe and the US in that regard as none of the MSNs pay their official corporation tax rates either.

So what we have in terms of tax rates for corporates across Europe and the US is very much the sight of a group of multilingual bald men fighting over an entirely fictional comb.
A well made point
 

making waves

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The OP should read ..........could be used to end Ireland's ability to act as a tax haven for tax dodging clonglomerates.
 

valamhic

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At a meetings of the UNECE parties in September the EU commission vetoed a proposal to allow citizens access to the EU Court of Justice on environmental matters. The problem with this post is that the Commission picks and chooses what it wants to take Ireland to task over.
 

Northsideman

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The OP should read ..........could be used to end Ireland's ability to act as a tax haven for tax dodging clonglomerates.
That's bollix, it means we ca no longer can make major decisions that effect what happens within our OWN borders, we are now a puppet state and FF and SF are loving it and defending it.
 

Voluntary

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That's bollix, it means we ca no longer can make major decisions that effect what happens within our OWN borders, we are now a puppet state and FF and SF are loving it and defending it.
If every EU country would have full sovereignty over the taxation, they could all stop MNC from moving profits across borders and then Ireland would get nothing. It would be enough if all EU countries stop recognizing internal cross-border money transfers between linked companies as business expense (like paying for patents use, or paying for using a brand name) to foreign subsidiaries. If Ireland do not compromise then something like that could happen and this would be a disaster for Ireland.
 

Lumpy Talbot

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No
Or a dose of reality which is in Ireland's case a lot more serious. Presumably our GDP figures would drop precipitously on the Leprechaun Index were we suddenly unable to count financial warehousing of MNC turnover as the product of our economy.
 

Northsideman

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If every EU country would have full sovereignty over the taxation, they could all stop MNC from moving profits across borders and then Ireland would get nothing. It would be enough if all EU countries stop recognizing internal cross-border money transfers between linked companies as business expense (like paying for patents use, or paying for using a brand name) to foreign subsidiaries. If Ireland do not compromise then something like that could happen and this would be a disaster for Ireland.
So what are you saying? Do we let others set our rates, spell it out?
 

Sync

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That's bollix, it means we ca no longer can make major decisions that effect what happens within our OWN borders, we are now a puppet state and FF and SF are loving it and defending it.
Except the OP doesn't pretend that at all. The EU can't force tax alterations on an unwilling country. It's that simple. No amount of squinting or hysterics will make it so.

On the wider corporation tax issue: If the US DO get their tax changes in and the UK follow suit in 2019, it's going to be more a case of the EU dropping their rates to closer to us than forcing everyone higher.
 

Dame_Enda

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It is disturbing. The OLP is QMV.
 

stopdoingstuff

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Where the Commission finds that a difference between the provisions laid down by law, regulation or administrative action in Member States is distorting the conditions of competition in the internal market and that the resultant distortion needs to be eliminated, it shall consult the Member States concerned.

If such consultation does not result in an agreement eliminating the distortion in question, the European, Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall issue the necessary directives. Any other appropriate measures provided for in the Treaties may be adopted.
We have a veto. If this is not the case then we were lied to. The fact that this is on the agenda now means that there are clearly some slimy manoeuvrings going on at EU level to rob us of our sovereignty. The EU is about empire and its powers should not be enhanced. It is totally illegitimate and were it a nation, it would not qualify for EU entry as it would not meet the democracy criteria. It is illegitimate and all forms of resistance against it are justified.
 


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