Post-Apple tax code review opens to public consultation

A review of the State's tax code, which the Government conceded after the European Union's Apple tax ruling last year, is being opened to public consultation this week, at a time when the Irish regime faces threats from Brexit, Donald Trump and European Union.

Minister for Finance Michael Noonan appointed Seamus Coffey, an economics lecturer, in October to look into the tax code to ensure it does not provide preferential treatment to any taxpayer and that Ireland remains competitive internationally, while "achieving the highest international levels of tax transparency".

The review was agreed as a concession to Minister for Children and Youth Affairs Katherine Zappone last September in order to secure Cabinet approval to appeal the European Commission's ruling that Apple owes the State €13 billion in back taxes. It is understood that the consultation period for the review, which excludes any possibility of a change to the State's 12.5 per cent corporation tax rate, will last for six weeks, finishing on April 3rd.

While there may have been a view at the outset of the review that it would just be a "box-ticking" exercise to ensure taxpayers were being treated fairly and equally, it is now taking place against the backdrop of increasing tax competitiveness involving large western nations, according to Joe Tynan, a partner with PwC Ireland.

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‘First weapons’

Mr Coffey, who last month became chairman of the Irish Fiscal Advisory Council, is due to complete his review and make recommendations to the Minister by the end of June.

“Tax seems to be one of the first weapons that some of the major countries [are resorting to now],” Mr Tynan said, noting, in particular, the UK’s and US’s recent moves.

UK prime minister Theresa May, who will start Brexit talks with the European Union by the end of next month, has pledged to cut the country's corporation tax rate to the lowest among the group of 20 major economies internationally, or G20, and create a "pro-innovation" tax system to offset the impact of Brexit. The UK corporation tax rate is already set to drop to 17 per cent in 2020, from 20 per cent currently.

Meanwhile, US president Donald Trump has put plans to slash the nation’s 35 per cent corporate tax rate to as low as 15 per cent at the heart of his ambition to boost the world’s largest economy and create jobs. Mr Trump is due to reveal what he calls a “phenomenal” tax reform package in the coming weeks.

Elsewhere, far-right French presidential candidate Marine Le Pen has promised to cut taxes for small- and medium-sized enterprises, while the European Commission has recently reignited proposals to implement a common consolidated corporate tax base (CCCTB). The Government is one of the main opponents to such a regime, which would require unanimous approval from all EU member states.