Corporate tax rate now a matter of national sovereignty

24 July 2011

by Cllr Joe Costello

The debate on Ireland's Corporate Tax Rate is over. The French have dropped their quid pro quo approach to the interst reduction on our bailout borrowings. No longer is there any pre-condition by any country that Ireland change its corporate tax rate.

During the run-up to the passage of the Lisbon Treaty in 2009 the Irish Government negotiated an agreement with the other 26 EU countries that the tax affairs of each Member State would be the sole responsibility of each member state. It was further unanimously determined that the agreement would be included in the next EU Treaty.

In 2013 Croatia will joined the EU probably in July. At that time the agreement will be incorporated into that accession Treaty and will have treaty status in the EU. Henceforth the setting of tax rates will be formally the preserve of each Member State.

Ireland should press to have the Croatian Accession Treaty passed during the Irish Presidency in the first half of 2013 to copperfasten our sovereignty in the area of tax setting at the earliest possible moment.