Dáil Éireann Debate, Thursday - 23 November 2023
188. Deputy Bernard J. Durkan asked the Minister for Finance whether it might be advisable for the EU to examine its policies in relation to state aid /competition rules, where such rules might be seen to undermine rules in relation to taxation, which remain within the competence of national governments; and if he will make a statement on the matter. [51762/23]
View answerState Aid, within the meaning of Article 107 TFEU refers to any advantage, granted by a Member State or through State resources, on a selective basis, to any undertaking that could potentially distort competition and trade in the European Union, and can take the form, inter alia, a tax advantage. As regards general taxation policy measures applied to individuals or open to all enterprises, such measures do not constitute State Aid under the Treaty and therefore falls outside the area of State Aid policy.
Ireland has always been, and continues to be, a strong proponent of unanimity in tax matters at EU level. Tax Sovereignty was one of the reasons the Irish people initially rejected the Lisbon Treaty. A subsequent Protocol to the Treaty provided guarantees in relation to tax sovereignty, which paved the way for the Treaty's approval in Ireland.
Ireland has shown that we are willing to engage with and agree EU tax directives that seek to implement agreed international best practices in a consistent manner across the EU. Through negotiations, Ireland always maintain the principle that matters of direct taxation remain a Member State competence under the treaties, and tax harmonization is contrary to that principle.
Taxation remains one of the most effective policy levers available to any Government, and each Member State has developed a tax mix appropriate to their particular economy. We fundamentally believe that tax competition is an important policy tool, particularly for smaller Member States, provided that competition is fair and based on substance.
