Stephen Donnelly (Wicklow, Independent)

I propose to share time with Deputies Shane Ross, Finian McGrath and Tom Fleming. I support the motion and commend it to the House. I thank Deputy Flanagan for chairing the committee and doing an excellent job in pushing us to come to this motion in a short space of time. The proposal for a CCCTB means our corporate tax regime is under threat on two fronts. Our corporate tax rate is under attack from France. We are all aware of this and we see reports in the media on the extraordinary position of the French. They insist that we increase our corporate tax rate in exchange for a reduction in the interest rate on money the Irish people are borrowing to bail out European financial institutions. It is extraordinary that the French want to profit from that as well as driving us into bankruptcy to bail out their financial institutions. It is extremely disappointing.

The corporate tax base is also under attack from the CCCTB and Brussels. The CCCTB purports to be a solution to a complex set of tax rules between European countries. From deliberation in the committee and from reading various files, it became clear to me that it is massively disproportionate to what is required and represents a Trojan horse for tax harmonisation, as described in this House. I hope and trust the Government will resist it. The reality of CCCTB would be that our tax base would shrink significantly. This would be worse than increasing our corporate tax rate. Many Deputies are opposed to increasing the corporate tax rate because it would scare off investment from domestic and international firms. Shrinking the CCCTB base would do the same thing, while reducing the Exchequer take from corporations. So this is more damaging than an increase in the corporation tax rate. As such, I oppose it strongly.

The CCCTB would also damage Europe. The EU's analysis shows that in eight of its 12 scenarios, the level of jobs in Europe and economic growth fell, and the EU's analysis shows that Ireland suffers far more than any other European country. We can see the reason for this. The CCCTB aims to change the principles of corporate tax in Europe rather than just clean up complex rules. It looks to tax corporate profits at the point of consumption. If the Germans sell a BMW to the French, the French Government will tax the profits on the car; the German Government does not get to claim any profits in an environment in which it invested public money. It is extremely distorting and would fundamentally undermine Europe's ability to trade.

I am concerned to hear from Deputy Charles Flanagan that the number of yellow cards required will not be met. I support the Government's decision to engage in this process and voted as such in the House. However, my support was on the basis that the engagement would be used to ensure that the CCCTB would never see the light of day or, at least, that we have no substantive part in it.

It is worth reflecting on the fact that at a conference in Washington DC a few weeks ago which I attended, French Minister Christine Lagarde stated in a fairly strenuous manner that there would be movement on the base. I reiterate that, thank Deputy Charles Flanagan and encourage the Government to resist this on an ongoing basis.

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