Changing to Qualified Majority Voting on tax issues will act against Irish competitiveness

Commenting on yesterday’s (15 January 2019) official Communication from the European Commission, calling on European leaders to consider moving to qualified majority voting in EU taxation policy, Chambers Ireland Chief Executive Ian Talbot commented, “Ireland’s tax system has been one of the key tools supporting Ireland’s competitiveness and has been utilised effectively for our economic development since 1956. As a small, open economy at the edge of Europe, we rely on such tools to compete and attract investment at an international level. Taxation is and should remain a sovereign Member State competence in order to maintain and preserve Irish competitiveness in relation to our European partners.

Changing to weighted majority, rather than unanimity, will dilute and hinder sovereignty on these matters. Ireland competes with many non-EU jurisdictions for Foreign Direct Investment and these new proposals will also potentially lead to a loss of opportunity for the EU, not just Ireland.

Instead, action on taxation, as we’ve highlighted in the past, should be undertaken multilaterally. We’ve consistently advocated for action by the OECD on tax issues and supported their proposals on tackling tax avoidance through international tax reform, as highlighted in their Base Erosion and Profit Shifting Report (BEPS).

It’s worth noting that it is possible for the EU to collaborate and take action on tax policy under the current voting system. The EU has done so in the past and can continue to do so. Economies are indeed changing and policy may well need to develop in response to these changes. However, a shift away from unanimity in voting on these new policies is not the best way to address these challenges.”