MINISTER for Foreign Affairs Dermot Ahern has moved to allay fears that Ireland's low corporation tax rate could be put at risk if the Lisbon Treaty is ratified and he has urged voters to support the treaty on June 12th.
Provisions of the treaty strengthened protection of the national tax regime, Mr Ahern said, by ensuring that Ireland had a veto on any EU tax decisions.
French finance minister Christine Lagarde caused concern for the Government last week when she told a conference in Brussels that France would push hard for a common method of computing corporate taxes when it takes up its presidency of the EU.
Mr Ahern's comments have been supported by the business group Ibec, which said the treaty would ensure Ireland remained attractive to investors. Speaking at the annual Law Society dinner at the weekend, Mr Ahern ruled out any changes in taxation, saying "tax sovereignty" was protected by the treaty. "We have had a lot of talk on the issue of taxation in recent days. The reality is this: the reform treaty secures the existing treaty arrangements whereby taxation matters must be decided by a unanimous vote. Taxation matters are and will remain within the competence of member-states."
Ireland would not support any move which jeopardised the low rate of tax on businesses, Mr Ahern said. "Issues such as a common consolidated corporate tax base would require unanimous agreement to become community law . . . Ireland simply would not support such a move."
Ibec's director of EU and international affairs, Brendan Butler, yesterday endorsed Mr Ahern's comments and said a Yes vote would protect business interests.
On corporation tax, he said: "The Lisbon Treaty actually clarifies the matter and sets out in clearer terms than ever before that every country in the EU has a veto over decisions in this area."
The treaty would ensure that the 1,000-plus foreign companies based here would have confidence that the favourable tax rates would endure. The protection of national sovereignty on tax was one of the main reasons Ibec was calling for a Yes vote, he said.
