Mick Wallace (Wexford, Independent)
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To ask the Minister for Finance his plans to progress discussions on the Common Consolidated Corporate Tax Base during the EU Presidency; and if he will make a statement on the matter. [1929/13]

Michael Noonan (Limerick City, Fine Gael)
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On 16 March 2011, the European Commission, which has the right of initiative to bring forward legislative proposals, published its proposal for a common consolidated corporate tax base, CCCTB. This represented the beginning of a process that involves a detailed examination of the proposal, line by line, by all member states at the Council working group. Since the Commission's proposal has been published, Department of Finance officials, along with officials from the Revenue Commissioners, have been attending the working party on tax questions which is the forum for discussions on the proposal. To date, officials have attended meetings on a regular basis on the proposal and there is still a long way to go before agreement on the Commission's proposal could be expected. The Cypriot Presidency completed a first read-through of the proposal in that member states have had the opportunity to give their initial views and ask questions, but no legislative re-drafting has occurred.

In our role as President of the Council of the European Union we will seek to be an honest broker in all tax policy discussions to see what the possibilities are for consensus and compromise among member states. Therefore, the Irish Presidency will continue with the work on the common consolidated corporate tax base, CCCTB, dossier following on from the Danish and Cypriot Presidencies. Our approach to the CCCTB proposal will reflect the views of colleagues from other member states. We intend to hold several meetings on the dossier, including a series of bilateral meetings.

Mick Wallace (Wexford, Independent)
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Work on the CCCTB proposal is moving rather slowly, but Ireland is committed to engaging constructively on it under the Euro Plus Pact. I note that the European Union Commissioner with responsibility for tax policy, Mr. Šemeta, has called on Ireland to help push forward the CCCTB proposal during our Presidency. The Government has issues with the maintenance of the 12.5% corporation tax rate and the financial transaction tax, both of which will play a role in the CCCTB proposal eventually. Owing to issues outside Ireland's control, there is no guarantee that we can sustain our low corporation tax rate, which calls into question the wisdom of relying so heavily on that policy.

The Minister will be aware that 11 EU member states are pursuing the development of a financial transaction tax. This group includes four of the five largest member states, namely, France, Germany, Spain and Italy. The 11 countries combined account for 90% of eurozone GDP. Having such a tax makes good sense, given everything that has gone on in the world of financial institutions in recent years.

I understand the Government's fear of losing jobs to London, but we should still sign up to the proposal because it would help to bring certainty and stability to business. The amount of money it would bring in would not be vast and would not be greatly different from stamp duty revenue in this regard. However, it would be a little more. We need to bring stability to the manner in which financial institutions operate, as they have caused so many problems. Aside from getting a fair contribution from them, such a tax would discourage risky trading activities and short-term investments. It would encourage more long-term investments, the lack of which is a major problem in the world today.

Michael Noonan (Limerick City, Fine Gael)
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The country holding the Presidency and its representatives chair meetings. In their capacity as chairmen, they are expected to act as honest brokers and advance the European agenda rather than their particular national agenda. When I chair ECOFIN meetings, the Minister of State at the Department of Finance, Deputy Brian Hayes, represents Ireland. That has always been the practice. I will not do anything to inhibit those countries involved in enhanced co-operation which are seeking to advance a financial transaction tax. I will facilitate the process, but we will not participate in it. The idea behind enhanced co-operation under the treaties is that countries which share a common objective can process it, subject to certain conditions and make it policy, but it does not apply to other countries not involved in it.

I have indicated that if there is a desire to discuss a financial transaction tax at the ECOFIN meeting on Tuesday, we can do so and the process could advance to the next stage. The discussion on the CCCTB proposal is not about the rate of tax but the base on which corporation tax is applied, on which there is little agreement. While we will do nothing to inhibit discussion on the proposal, the likelihood that there will be an agreement during the Irish Presidency seems remote. If people want to discuss and move it forward, that is fine.

Mick Wallace (Wexford, Independent)
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Does the Minister agree that the decision not to sign up to a financial transaction tax is a short-term one from our perspective and that a more positive decision in the long term would be to sign up to it?

Michael Noonan (Limerick City, Fine Gael)
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I do not believe so. The Deputy referred to the risk of financial services companies migrating from Dublin to London. That is a risk, but what is being examined in terms of a financial transaction tax is stamp duty on certain transactions. We already charge stamp duty of 1% on transactions of shares, a measure which is analogous to what is being discussed. However, once it is introduced, it may migrate to other areas. We will watch it carefully, but it is not 1 million miles from what we apply. There is a similar tax in London of 0.5%. The original proposal from France was stamp duty starting at a figure of 0.1%, a good deal lower than what we apply. Thus far there is nothing dramatic about it, but they may apply it to instruments other than share transactions, in which we would be interested because it might affect the financial services industry here.