Joan Burton (Dublin West, Labour) | Oireachtas source

As we have heard from Deputies Fleming and Brophy, the all-party committee argues that the proposal offends against the principal of subsidiarity. With respect, I do not see how it does so. Subsidiarty is defined such that in areas which do not fall within its exclusive competence, the Union can act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the member states either at central level or at regional and local level but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level. I would have thought it was clear that this is a matter where agreed objectives cannot be achieved by the member states acting alone and where EU action is, therefore, needed.

I note that the committee is supportive of measures encouraging greater corporate social responsibility generally, including measures providing for fair and transparent accounting and reporting arrangements by large corporations. That position is welcome. The only argument that this is a tax measure rather than an accounting measure is in the committee's questioning of the use of an amendment to the accounting directive as the appropriate means of achieving its objective in this case. To note the fact that an accounting directive is proposed to be amended is to miss the point.

The legal basis for this proposal, as stated by the Commission, is Article 50 of the Treaty on the Functioning of the European Union, which relates to the right of establishment and the setting out by directive of harmonised conditions for the exercise of that right or rights. I agree with the Commission that, in an increasingly global and integrated economy, enterprises can easily relocate their tax bases from one jurisdiction to another within or outside of the Union. The EU's action is justified in order to address the cross-border dimension where there is aggressive tax planning or transfer pricing arrangements.

There is a growing international consensus about the need for greater tax transparency. This proposed directive aims to enhance transparency and public scrutiny of corporate income tax by adapting the existing legal framework concerning the obligations imposed on companies and firms in respect of annual reports. It clearly does not concern the harmonisation of taxes, only obligations to publish reports on income tax information. I have been a strong supporter of the base erosion and profit shifting, BEPS, process, although achieving sufficient progress in that regard has been slow and difficult. The Panama papers have disclosed extraordinary levels of aggressive tax evasion, avoidance or whatever one wants to call it. In many countries, the tax bases are increasingly being eroded. The committee received a detailed submission from Christian Aid setting out the consequences of this, particularly for developing countries. Unless we develop the collective will to publish a relatively modest amount of additional information in annual reports and such like, it is difficult to see how there could be any level of accountability on the part of what are, by any standard across the Union, very large enterprises. This situation can only be progressed if countries act together. We need to consider people's best interests globally in this respect. When we do, we will see the answer. If everyone has a mé féin, beggar my neighbour attitude, we will find it almost impossible to make progress on BEPS or any other element that seeks to bring additional transparency to what some large multinational corporations are aggressively doing, according to the limited information contained in the Panama papers, to avoid making any tax payment in almost every jurisdiction on what are by global standards extraordinary profits.

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