EU Commission proposal for an EU anti-tax avoidance directive passes...
Sinn Féin MEP Matt Carthy issued a damning assessment of how the State handles its tax affairs in front of the European Parliament yesterday.
Carthy, a member of the Economic and Monetary Affairs Committee, said:
"My home state of Ireland has a reputation as an enabler of massive tax avoidance for large corporations and the wealthiest in society. Unfortunately the perception is true."
He honed in particularly on how the Government is abolishing the controversial 'Double Irish' tax structure, by giving the multinational likes of Google and Microsoft until 2012 to "restructure their tax avoidance techniques".
The Knowledge Development Box, which aims to encourage research and development by offering a 6.25% tax rate on profits arising to certain Intellectual Property Assets also came under fire, with Carthy saying:
"We know this won't foster innovation - it's just another tax avoidance mechanism, another hand-out of millions to multinationals."
"Loopholes in the Irish system," Carthy concluded, "have been designed to perfectly complement the loopholes in US tax law to benefit massive US corporations."
Fine Gael MEP Sean Kelly deemed his comments to be "totally unacceptable" and criticised the Sinn Féin MEP for "pointing the finger at his own country".
Following that heated three-hour debate in Strasbourg, the European Parliament voted today on a new anti-tax avoidance directive. The EU Commission proposal reflected the OECD's action plan to limit tax base erosion and profit shifting. It passed by 486 votes to 88.
MEPS also advocated for stricture limits on deductions for interest payments, tougher rules on foreign income and more transparency for trust funds and foundations.