Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Economic and Monetary Affairs Committee voted to adopt a legislative report bringing transparency, co-ordination, convergence to the corporate tax policies in the Union on 1 December 2015, yesterday. This report asks the European Commission to table measures to improve corporate tax transparency, co-ordination and EU-wide policy convergence. The recommendations contained in the report build on the work of the Parliament's special committee on tax rulings, set up in the wake of the LuxLeaks revelations, whose recommendations were approved at the 26 November plenary session. The report covers recommendations on a wide range of measures, including country by country reporting, CCCTB, improving cross-border taxation dispute resolution mechanisms and reform of the code of conduct group.

In the area of taxation, the European Parliament is not a co-legislator. As such, there will be no immediate legislative impact from the report. However, the Commission may take the report into account in preparing the January corporate tax package on the implementation of the BEPS measures in the European Union. The European Parliament does not have a taxation function and while its reports are usually very interesting and thorough, they are advisory in nature. Therefore, I do not see them as a threat, but as good research work which is always worth reading.

To go back to the previous issue raised which I did not answer, the Deputy spoke about the tax trends for November. We are approximately €470 million ahead of profile for November. This brings the position, after 11 months of the year, to a shade under €3 billion of taxes above the forecast. If we go back to the budget, it mentioned a sum of €2.2 billion, which was to give us the wherewithal to give us the extra expenditure measures to which I referred in the Supplementary Estimates.

It also gave us enough to bring the deficit down from 2.7% to 2.1% of GDP. With the extra tax coming in and on the assumption that December will be in line with forecasts, it is safe to say the end of year deficit will be below 2% and probably around 1.7% or 1.8% or even down to 1.6%. That advances the base for the budget for 2016. We said that for 2016 we were pitching for 1.2% but we will be so close to the end position for 2016 once the year starts that it would be safe to assume we can take 0.4% off that as well. That would be 0.8% or 0.7%. As we are getting signals that the rules may change again in Europe and that a balanced budget may be redefined as 0.5% rather than 0%, one can see how close we are. That is why I referred earlier to the possibility of balancing the budget ahead of our 2018 deadline. However, that is in nominal terms. I would have to go through the figures in more detail to give the committee an estimate of when there will be structural balance.