Labour MEP for Munster, Phil Prendergast, has welcomed news that the European Commission plans to introduce more stringent legislation to tackle multinationals who seek to avoid tax.
The legislation, to be proposed by the EU’s Commissioner for Taxation, Algirdas Semata, in December, will include improvements to the current situation such as:
1. A stricter definition of ‘tax haven’ will be adopted instead of sole reliance on the old double taxation agreements.
2. A general anti-abuse clause in national legislation which prevents or ignores artificial corporate structures created for the purpose of avoiding tax.
Speaking from Strasbourg, Ms. Prendergast said; “I think it is time that companies that come to Ireland and that make a profit from their decision to base themselves out of Ireland, would also pay a fair rate of tax in Ireland.
“We have heard a lot recently about multinationals, particularly American multinationals, creating a base in Ireland and then funnelling funds to the Bahamas and other tax havens, for the purposes of avoiding what is a very fair corporate tax rate.
“I welcome the move by the Commission to tackle this problem and to start forcing companies that profit from our highly educated labour force, and our business-friendly environment, to pay their way when it comes to tax.
“I would also hope that this proposal would start a conversation in Ireland and across the EU about corporate tax and what we expect of multinationals.
“I think we shouldn’t be afraid to have a reasonable and informed debate on tax policy, especially given our current economic situation.”