The European Commission has put forward a set of proposed reforms dubbed the Common Consolidated Corporate Tax Base (CCCTB), which it says will serve as a 'powerful tool' against tax avoidance.

They’ve put forward similar proposals in the past but they were resisted successfully by a number of states including Ireland and the UK

The Commission is proposing a two-step process – they will introduce a common basis for taxing large companies first with common allowances and credits for the likes of research and development. They argue this will reduce costs for large corporate entities and boost investment

If that gets through, and it may, then comes the much more threatening proposal for Ireland – consolidation.

This would see the large company’s tax payments divided up among all member states depending on their assets, employees and sales in each country. 
 
This would favour larger countries, and result in companies who are based in Ireland but have assets such as warehouses, or staff in other countries, and who make sales in other EU states, paying corporation tax in Ireland on a smaller proportion of their income, and more in other states.

Peter Vale of Grant Thornton says we need to be very wary - he joined Vincent Wall on Breakfast Business and described these proposals as "quite radical and frightening for Ireland."

"If you asked me 12 months ago I would have said that the likelihood of this coming to pass and getting passed by the Commission or Parliament would have been low - it's probably moved up a notch now" he said

Mr Vale noted that the UK would have opposed these proposals, but their leaving the Union will mean that Ireland looses a key ally to fight these rule changes.

The Commission argues that they would increase the EU's overall growth rate by 1.2%, and add 3.4% to the total level of investment across the Union.