Andrew Doyle (Wicklow, Fine Gael)
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Question 43: To ask the Tánaiste and Minister for Finance his views on the call by Forfás to introduce changes in the way VAT is calculated under EU rates. [7787/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I presume the Deputy is referring to the recommendations concerning VAT made by Forfás in their "Review of the European Single Market" of January 2008. In this regard, Forfás calls for new VAT rules for cross-border business to be introduced which would shift the place of taxation to where services are consumed, to replace the existing rules based on the location of the supplier.

The position is that the new rules providing for the shift in taxation to the place of consumption for cross-border services were adopted by the EU Council for Economic and Financial Affairs (ECOFIN) at its meeting on 12 February 2008. The new rules which cover business-to-business (B2B) and certain business-to-consumer (B2C) services were agreed as part of a package of VAT measures designed to streamline and simplify the VAT system for cross-border traders. The measures also include new procedures enabling cross-border traders to apply online through their home Member State for VAT refunds due from other Member States. This change from the existing paper-based system should make for a more efficient service to traders.

The new rules for cross-border B2B transactions will be introduced on 1 January 2010. The new B2C rules, which will cover telecommunications, broadcasting services and electronic services, will be brought into force on 1 January 2015. A "one-stop-shop" facility will support the new B2C arrangements allowing service providers to fulfil their VAT registration and declaration obligations online in respect of the Member States where they conduct business.

Ireland was supportive of the new VAT measures for cross-border services which, in line with Government policy, should reduce the administrative burden on business and thereby deliver a more attractive environment for traders operating across the Internal Market.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 44: To ask the Tánaiste and Minister for Finance the impact a common consolidated corporation tax base across the EU would have on this State. [7690/08]

Arthur Morgan (Louth, Sinn Fein)
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Question 74: To ask the Tánaiste and Minister for Finance his views on whether the work of the working group on Common Consolidated Corporation Tax Base chaired by an official from the Taxation and Customs Union Directorate General of the EU Commission is leading towards the introduction of such a CCCTB across the EU. [7688/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 44 and 74 together.

I would note that although various technical work has been taking place, the Commission has not yet made any formal proposal in relation to the common consolidated corporate tax base (CCCTB) proposition, and I would hope that the Commission will reflect on the considerable scepticism and opposition to the proposition among Member States before deciding whether to make any such proposal.

It is important also to remember that there have been no political decisions taken on the CCCTB at the level of the Council of Ministers.

Considering that the Commission has not yet brought forward a proposal it is very difficult for us or any other Member State to estimate its impact with any precision. However, it seems very likely that if, theoretically, such a system were to be introduced, it could give rise to considerable disruption of foreign direct investment activities, could create a disincentive for the location of such investment within the EU, could reduce the ability of Governments, especially in smaller and faster developing member states, to manage their own fiscal affairs, and would be divisive in Europe.