Ireland: Moscovici in Ireland to discuss CCCTB
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Ireland: Moscovici in Ireland to discuss CCCTB


Catherine O’Meara

Olivia Long

EU Commissioner Pierre Moscovici appeared before the Irish Government Committee on Finance (the committee) on January 24 2017 to answer questions on the re-launch of the common consolidated corporate tax base (the CCCTB).

It was clear from the meeting that the proposal has limited support from the parliamentarians present who represented both government and opposition parties. This is not surprising. In December 2016, the Irish government issued a reasoned opinion in respect of the proposed CCCTB on the basis that it breached the EU principle of subsidiarity.

The main objections raised by the committee were that:

  • The proposal falls within an area of national competence and impacts Ireland's tax sovereignty. Commissioner Moscovici disagreed: "I argue to the contrary, that EU coordination on tax matters reinforces rather than threatens national sovereignty." He also noted that the proposal would only be adopted if accepted by all member states, including Ireland and that the requirement for unanimity in tax matters protects Ireland's tax sovereignty;

  • The proposal would require Ireland to abolish two of its three rates of tax that apply to companies (trading profits are taxed at 12.5%, passive income is taxed at 25% and gains on disposals of capital assets are taxed at 33%). This would represent a further encroachment into Ireland's tax sovereignty and could potentially result in a €450 million ($479 million) loss of tax revenue. Commissioner Moscovici agreed that the three rate regime was incompatible with the CCCTB proposal, however, he believed that Ireland's tax sovereignty will still be protected because Ireland will be permitted to set the rate;

  • It is anticipated that, if adopted, the CCCTB would narrow Ireland's tax base and ultimately reduce Irish corporation tax revenues. Commissioner Moscovici noted that, so far, the European Commission has only undertaken an impact assessment of the proposal on the EU as a whole. Under that assessment, corporation tax revenue on an EU-wide basis would increase by 1.2%. He acknowledged that no country-by-country assessment has yet been undertaken by the Commission and this could be addressed; and

  • The allocation key included in the proposal is expected to result in taxable profits reducing in countries with net export economies (such as Ireland) and increasing in countries with large domestic markets (such as France). In response to this, the Commissioner noted that the allocation key is based on a "tried and tested formula", which has been used in the US. He noted that it was difficult for taxpayers to manipulate and he considers that it is "the best proposal for all member states, large and small."

Commissioner Moscovici's appearance before the committee did not seem to allay the concerns of those present and seems unlikely to change the Irish position on the CCCTB. Commissioner Moscovici acknowledged this is in his closing remarks to the committee referencing their "shall we say, special spirit or fighting spirit". In closing, he asked the committee to "take the proposal on the table as a proposal, and examine it with good faith".

Catherine O'Meara ( and Olivia Long (


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