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The EU is considering a minimum corporate tax rate, and that's bad news for Ireland

Pressure from Germany and France could see the European Commission reveal an initial plan on the matter next month.

Such a proposal would affect those multinational companies based in Ireland such as Apple.
Such a proposal would affect those multinational companies based in Ireland such as Apple.
Image: Niall Carson/PA Archive

THE INTRODUCTION OF a minimum corporate tax rate across Europe is being considered by the EU, with an initial plan expected to be revealed next month.

The plans, which were reported by the German business publication Handelsblatt, are being pushed by both Germany and France who want the EU to crack down on tax havens set up by smaller countries.

The proposal could spell bad news for Ireland whose 12.5% tax rate is the lowest in the EU.

Germany and France have two of the highest corporation tax rates with 30.2% and 34.4% respectively, although companies in France were found to be only paying a tax on profits of 7.4%. Ireland’s actual company tax rate was found to be close to the headline rate of 12.5%.

The push comes after the LuxLeaks scandal occurred late last year where the Luxembourg government admitted it had lured companies like Amazon to the country by offering them special tax conditions.

A similar proposal was brought forward back in 2011, but was rejected by a number of EU countries including Ireland. The proposal would have seen multinationals pay their tax for all the EU into a pool and the money would be doled out to states within the region according to a formula.

It’s believed the EU’s executive body will unveil an initial plan on 17th June.

Amazon

Meanwhile, Amazon said it has started declaring sales made in major European markets in the respective countries instead of Luxembourg, meaning it will pay taxes on the sales in the nations.

“As of May 1, Amazon EU Sarl is recording retail sales made to customers through these branches in the UK, Germany, Spain and Italy,” the company said in a statement.

“Previously, these retail sales were recorded in Luxembourg. We are working on opening a branch for France.”

Amazon is among several large companies under the spotlight in Europe over tax deals in Luxembourg and elsewhere.

The EU is investigating tax deals involving US tech giant Apple in Ireland, coffee-shop chain Starbucks in the Netherlands, and Amazon and Italian automaker Fiat in Luxembourg.

(Additional reporting from AFP)

Read: Turns out Ireland was telling the truth about company taxes. Unlike nearly everyone else… >

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Quinton O'Reilly

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