Brexit presents opportunity to defend our tax position
German chancellor Angela Merkel has reached agreement with the Social Democrats on the formation of a new grand coalition, the terms of which have to be voted on by party members now. Crucially, it gives the influential finance ministry to Martin Schulz's party. The SPD has in the past been critical of Ireland's corporate tax and many technology firms that operate here.
Brian Keegan, Head of Taxation and Public Policy with Chartered Accountants Ireland, said there has long been a challenge to Ireland and our tax regime from Europe. He said the narrative had changed, but in ways it was more honest. "It used to be that we weren't collecting enough tax. Now they're saying they want to see EU countries getting tax more relative to the size of the markets, so a small market like Ireland would lose out as a result of these proposals."
Mr Keegan said Ireland was losing an ally at the table on the corporate taxation front in Europe due to Brexit and the country's only allies after the UK leaves will be smaller EU economies. "Corporate tax is a huge component of the overall Irish tax take. 13% of revenue comes from companies - if we're challenged and we have to collect less, there'll be a hit right across the returns," he stated.
Brian Keegan said Brexit presented opportunities to defend our position on tax. "We have the attention of the EU by virtue of Brexit. If Ireland is to be relied on to secure customs union, there has to be a quid pro quo and that's allowing us to continue with tax sovereignty and tax policies," he said.
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