During the Plenary Session on February 16, Irish Minister for Finance Michael Noonan addressed the recent development of international taxation and problems with aggressive tax practices. Minister praised OECD BEPS project, but warned against the EU efforts that deviate from BEPS recommendations.
Minister Noonan summarized recent years of development of preventive measures against aggressive tax practices and pointed out that these are neither sustainable from a tax point of view, nor acceptable from a societal point of view. "I, like many others, believe that corporations should contribute more," he stated.
The BEPS project has produced a remarkable international consensus on the steps that now need to be taken to tackle aggressive tax planning and harmful tax practices, the minister said. "The OECD deserves a huge amount of credit for delivering this work in a timescale many believed was unachievable," he said.
The minister stressed that the work at EU level should continue to focus on implementing the BEPS recommendations and should not move away from the BEPS consensus. Example of that is the European Commission proposal for a Common Consolidated Corporate Tax Base (CCCTB), which moves away from the arm’s length principle towards allocating profits by formula. According to the minister, this idea was rejected by the BEPS process in favor of stronger, more modern transfer pricing rules.
"No man can serve two masters, and no country can implement two competing philosophies on how companies should be taxed," Michael Noonan said when criticizing the EU efforts.
Source: Irish Department of Finance
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