Bernard J. Durkan
Question:130 Mr. Durkan asked the Minister for Finance his views on tax harmonisation in the euro zone; and if he will make a statement on the matter. [25584/02]
Written Answers. - EU Tax Harmonisation.
Ireland supports the retention of national sovereignty in tax matters and has long cherished its view that it is appropriate for fiscal matters in the European Union to be decided on a unanimous basis. A case has not been made that the introduction of the euro makes such harmonisation either necessary or desirable nor that the current position adversely affects the operation of the internal market. Tax harmonisation would ignore the varying needs and motivations of the member states' differing economic, social and cultural backgrounds.
In relation to the area of corporate taxation, Ireland has a transparent corporate tax regime that encourages investment by having a competitive rate. In an EU context, to the extent that differences in corporate tax treatment cause barriers to trade and investment, we are quite prepared to work to remove these. I am of the opinion that making progress on those types of issues does not require full harmonisation of systems and rates. Therefore, I do not support any procedure that would lead to the introduction of a harmonised rate of corporation tax across the European Union.
My approach to indirect taxation mirrors the view I take on business taxation. Indirect taxation issues should be determined on the basis of unanimous agreement among the EU member states. Indirect taxes, and in particular value added tax – VAT – are subject to regimes which have a substantial basis in European law, but the basis for which has been determined by unanimous agreement among the member States. This approach facilitates tackling common issues and removing barriers to business operating throughout the European Union, while still respecting the importance of national sovereignty in fiscal matters.
Question No. 131 answered with Question No. 64.
Question No. 132 answered with Question No. 73.