French tax

EU Commissioner Mairead McGuinness on collision course with government over taxation

EU Commissioner Mairead McGuinness said she would support ending member states’ right to veto EU tax policy in some cases, putting the former Fine Gael MEP on a potential collision course with the government here who has long prized Ireland’s fiscal autonomy.

Aread McGuinness said majority voting could be introduced if countries abuse their veto power to exert influence on other issues.
The former vice-president of the European Parliament previously defended Ireland’s veto, but said the position on taxation had evolved.
That puts it on a possible collision course with the Irish government, which just last year tried to block a majority-passed tax transparency law.

“I think I would support her in areas where member states might block something for reasons other than areas related to the proposals on the table,” she told a group of reporters in Brussels.

“On taxation, I know that I would have defended unanimity in Parliament because Ireland had a very strong view of taxation. I think it evolved. »

French Finance Minister Bruno Le Maire last week called for an end to national vetoes on EU tax legislation after Hungary used its 11th-hour veto to sabotage a 15% minimum tax on large multinationals.

The veto came just after Poland officially lifted its opposition to the deal. Poland signed on after the EU released €36 billion in pandemic funding for the country and pledged to pass a parallel tax deal targeting the world’s biggest tech companies.

This agreement encountered a technical problem at the Organization for Economic Co-operation and Development (OECD), which drafted and negotiated the two agreements last year.

It’s also unclear when and even if the United States will sign either deal, given political disagreements over President Joe Biden’s infrastructure and investment plans.

The European Commission has said it will table legislation on the other part of the deal – known as Pillar 1, and which could cost the Irish Treasury up to €2 billion a year – if it does not. cannot be agreed internationally.

A total of 137 countries – including Hungary, Poland and Ireland – signed the two agreements last October, in principle. The EU then tabled a bill implementing the 15% rate.

Hungarian Foreign Minister Peter Szijjarto said last week he was ‘not in favour’ of the tax because it could deal a ‘hard blow’ to European businesses struggling to cope with the effects of war Russian in Ukraine.

“I think what Hungary did was last minute, there’s no doubt about that,” Ms McGuinness said.

“Maybe they look at what the United States is doing. And that could have an impact on what the United States is doing.

“I can’t say for sure that this proposal is therefore derailed, but it is certainly, from our point of view, a bit of a setback.

“That does not mean we would back down from our commitment, and we hope the United States will do the same.”

Ireland has fiercely defended national vetoes on issues such as taxation and foreign affairs, where it has stuck to its principle of neutrality.

But discuss whether the removal of national vetoes on foreign affairs resurfaced after Hungary stalled on the latest set of EU sanctions against Russia.
Budapest delayed that deal for weeks as it negotiated a compensation package with the EU.

Last year, an EU parliamentary committee suggested using majority voting for tax matters, which is possible under EU treaties if national laws “distort” the single market.

The European Commission’s economics chief, Paolo Gentiloni, also floated the idea and said last week that “unanimity is a difficulty in many circumstances”.

His boss, Commission President Ursula von der Leyen, told the Politico news site this week that she was “deeply convinced” that national vetoes on foreign policy issues should end.

It comes a month after a series of EU citizens’ consultations – under the banner of the Conference on the Future of Europe – concluded that the Treaties needed to be changed to allow majority voting in certain cases. .