The European Parliament’s Economics and Monetary Committee has approved plans for the controversial "Common Consolidated Corporate Tax Base".
The committee this afternoon voted in favour of the plans by 39 votes to 12 votes, with five abstentions.
The committee said the CCCTB would be part of a wide-ranging proposal to create a "single, clear and fair EU corporate tax regime".
It would see a single set of rules applying to companies operating within the EU to calculate their taxable profits.
It is seen as a solution to the clamping down on big companies using loopholes to dodge tax.
The committee said the proposals include "benchmarks to determine whether a firm has a "digital presence" within an EU member state which might make it liable for tax even if it does not have a fixed place of business in that country".
However, CCCTB is a concern for the Irish economy, with the Irish Fiscal Advisory Council previously warning the Government that it posed a bigger threat to the Irish economy than Brexit.
Fine Gael MEP Brian Hayes said: "The ECON Committee report on CCCTB poses yet another threat to Irish corporate tax policy.
"Although the parliament’s role in EU tax dossiers is limited, this adds to the growing political pressure to harmonise corporate tax policy in the EU.
"Let’s be clear – the CCCTB file as it stands would destroy Irish corporate tax revenues. IBEC has estimated that it could erode our corporate tax base by up to 50%."
Sinn Féin MEP Matt Carthy also voted against the proposal saying "it is a seriously flawed proposal that Sinn Féin can't support".
He said: "As well as worries over the impact this will have on the Irish state's tax powers and revenue, my key concern is that EU member states are being asked to transfer further powers over taxation to the Commission in exchange for the promise that this new system will end the ability of multinationals to shift profits, but shortcomings in the proposal mean this goal will not be achieved.
"Profit-shifting outside of the EU is not addressed at all by this proposal and will actually increase the incentive for multinationals to shift profits outside the EU."
The matter will be voted on at a full plenary session of parliament in March.
The @Europarl_EN Econ Committee report on #CCCTB poses yet another threat to Irish #corporatetax policy. I voted against the report as it goes further than the original proposal and would also impose a new digital tax,without any proper impact assessment https://t.co/iay0llWcUm pic.twitter.com/4OAupNKmA6
— Brian Hayes MEP (@brianhayesMEP) February 21, 2018
