Selective bias driving the Commission’s tax probes – Hayes
ECJ has overturned Commission decisions on State Aid in the past
Following the publication of a White Paper by the US Treasury on Wednesday, Brian Hayes MEP for Dublin said that the Commission has taken a selective bias when pursuing state aid cases.
“A selective bias is driving the European Commission’s recent tax probes. There has been a real propensity from the Commission in recent years to go after large US multinationals based in Europe due to their tax structure. The majority of the big ticket state aid cases that the Commission has taken have been against US multinationals. The four recent in-depth investigations from the Commission all concern US multinationals – Apple, Amazon, Starbucks and Fiat-Chrysler.
“I welcome the US Treasury’s White Paper on the Commission’s state aid cases. It makes clear that the real issues at stake in the Commission’s state aid investigations are matters for the US Treasury and ultimately US taxpayers may have to foot the bill of a negative finding from the Commission. Also, a negative outcome could potentially undermine individual US tax treaties with Member States.
“I recently asked Commissioner Vestager to justify why certain cases are investigated over others on the question of State Aid. In 2014 the European Court of Justice annulled a Commission decision against Spain from 2011 in respect of alleged state aid given to certain companies. This is clear evidence of the Commission overstepped its bounds when it comes to state aid cases by using an expansive definition of what constitutes state aid.
“Commissioner Vestager claims that the ECJ judgement on the Spanish state aid cases has no bearing on the current state aid investigations. It is true that the substance of these cases are different but it cannot hide the fact that the Commission is continuing to pursue its own agenda when it comes to tax probes. Corporate taxation is a matter for Member States and under the Treaties the Commission cannot interfere in Member States’ corporate tax rate policy.
“The recent Commission decisions on tax rulings for the Netherlands (Starbucks), Luxembourg (Fiat/Chrysler) and Belgium have all been appealed, partly on the basis of a violation of Member State sovereignty as regards tax matters, in other words that the expansive interpretation of EU State aid rules by the Commission leads to a de facto harmonisation of taxation ‘through the back door’.
“Member State tax sovereignty is of critical importance, particularly after the UK referendum result. The Commission needs to take stock of the different voices expressing concern in these cases.”
Hayes calls for increased focus on European studies
Dublin MEP, Brian Hayes has today (Wednesday)) called for an increased focus on European Studies in primary and secondary schools in Ireland.
“Recent surveys show that 44% of EU citizens feel they have a limited understanding of the EU. In addition only 28% of EU citizens aged 18-24 voted in the last European elections. These figures clearly show that more needs to be done to explain how the European Union works.”
“A European dimension does exist in the Irish secondary curriculum through CSPE. The Blue Star programme has also helped students to understand the EU better. However, more needs to be done. There is room to improve. We need to change the impression many people have of the European Union.”
“The referendum in the UK produced a number of factually incorrect statements about the EU – which could have been avoided had people a better understanding of it. One benefit that the referendum has had is that it has encouraged more people to talk about the EU and to ask for information on what the EU does. Amazingly, one of the most frequently searched questions on google in the days after the UK voted to leave the EU was “What is the EU?”
“I believe the EU has big role to play in providing the resources to Member States to help citizens learn more about the EU. This could be achieved by the EU providing funding to schools to teach classes on active citizenship, cultural awareness, knowledge of EU rights, language skills and other programmes such as the role of Erasmus+. There are many opportunities available to citizens that simply need to be explained further” concluded MEP Hayes.
Purchased an item on holidays that turns out to be faulty? The European Consumer Centre can help – Hayes
Purchased an item on holidays that turns out to be faulty? The European Consumer Centre can help – Hayes
Fine Gael Dublin MEP, Brian Hayes has highlighted to Irish citizens travelling abroad this Summer to be aware of their consumer rights and the support structures that are in place when purchasing goods in another EU country.
“70% of Irish people who go on summer holidays remain within the EU. Those on holidays often purchase clothing and electronics or avail of services such as hotels and restaurants. However, not many people are aware of the services that the EU has in place to protect them against faulty products or poor services.”
“Every EU Member State has a European Consumer Centre (ECC) whose job it is to resolve complaints between consumers and traders in different EU countries. When necessary the ECC can liaise directly with a trader via its sister centre in the country of purchase.”
“For example – You are on holidays in Spain and purchase a camera which stops working when you return to Ireland. You have emailed the shop but have failed to receive an adequate response or have language difficulties. You can contact the ECC who will advise you or make representations on your behalf via the Spanish ECC. The same entitlement applies if you purchase the product online.”
“So far this year the European Consumer Centre in Dublin have assisted over 1,998 individuals. This number is expected to rise in the weeks ahead following the summer holiday period. The biggest areas of complaints were air travel, car rental, electronic goods and online services. In the last annual ECC report the Dublin office secured over €80,000 in refunds for consumers.”
“When faulty items are purchased in Ireland you simply return it to the shop but this is not possible when the seller is in another country. The ECC provides a valuable service and I would encourage consumers to avail of their services if they find themselves in the position of purchasing faulty products” concluded MEP Hayes.
Problems with EU red tape can be solved using EU Website – Hayes
Brian Hayes MEP today (Sunday) said that Irish businesses who are experiencing difficulties with public authorities in other EU Member States can have problems resolved within 10 weeks using the European Union’s ‘SOLVE IT’ website.
“SOLVEIT has a base in each EU member state but works mainly online. Issues that it can help businesses with include trade and services problems, issues with vehicles, insurance, cross border movement of funds as well as VAT refunds.”
“The services of SOLVIT are not solely unique to businesses. Individuals can also look for issues to be resolved. Irish citizens experiencing difficulties in other EU Member States with family benefits, pensions, obtaining access to education or working can all use the services of SOLVEIT.”
“SOLVEIT is not a solution for solving disputes between Irish and other EU companies or consumer issues. It also cannot help if a person or business is seeking compensation or there is a pending court case. Effectively it is a tool to cut through red tape in public authorities in EU Member States” concluded MEP Hayes.
Commission budget rules to switch emphasis to government spending – Hayes
Ireland one of the only Member States that can currently afford real expenditure growth
Brian Hayes MEP today (Thursday) said that the European Commission is making attempts to switch the focus of its budgetary and fiscal rules on expenditure benchmarks and Ireland must be prepared for such a move.
“The government must prepare for the European Commission to take a stricter stance on government spending in the coming years. At the moment, the Commission has been mainly focused on ensuring that Member States get their budget deficits down towards balanced budgets. Not as much attention has been placed on government spending rules as long as governments were working towards reducing their deficits.
“Through my discussions with DG ECFIN, the Commission has made it clear that it is now preparing to turn its focus on how much governments spend in line with their potential GDP growth.
“Throughout the financial crisis and up to now the key focus from the Commission has been on the rules that the budget deficit must be below 3 percent and public debt must be below 60 percent of GDP.
“But now the Commission’s emphasis will begin to shift towards the limits placed on government spending, or ‘expenditure benchmarks’, as set out in EU fiscal rules. The expenditure benchmarks are established in line with a country’s potential GDP growth which is calculated over a ten-year period, including the growth rate of the previous five years, the current year and the following four years. 0
“For Ireland, the allowable expenditure growth was set in 2013 based on a 10-year average of potential GDP growth estimates from 2008 to 2017. However, the expenditure benchmark has been increasing as our budgetary position improves. But notably, under the fiscal rules, if Ireland breaches its expenditure benchmark it must match this by additional discretionary revenue measures.
“The enforcement of these expenditure rules are likely to become stricter. There is potential for new or amended legislation to bolster the Commission’s hand at enforcing government spending rules, yet discussions with Member States are still at a very early stage and there is likely to be major resistance to further legislation on budgetary rules.
“Ireland as a small open economy is very susceptible to shocks; this means that our budgetary position is subject to massive changes. We need to prepare properly for the future – no longer can we spend freely when times are good and tighten up when times get bad. We need to be able to put money aside when we have the budgetary capacity to help us in the bad times.
“According to Commission sources, Ireland is currently one of the only Member States that can afford real expenditure growth. But we need to have a good balance between our tax base and government spending. The government is on the right track but needs to be prepared for stricter enforcement of the spending rules in the years to come.”
Know your travel rights before you travel – Hayes
70% of Irish holidaymakers travel to an EU country. Strong laws cover cancelled and delayed flights.
Fine Gael MEP, Brian Hayes has highlighted EU laws concerning flights within the EU and urged holidaymakers to know their rights before traveling. The Dublin MEP also advised holiday makers to ensure they travel with their European Health Insurance Card.
“August is traditionally a very busy time for airlines across Europe. 70% of Irish holidaymakers travel to an EU country. Unavoidable delays will naturally occur. If a flight is cancelled or delayed EU law states passengers must be given a choice between re-routing to your final destination or a refund. Airlines are required to provide passengers with information, care and assistance, and compensation in certain circumstances.”
“Not enough is being done to get the message out especially this time of the year as families head off to the sun. If you are flying from any airport in the EU and your plans are disrupted, you have rights and entitlements under EU law.”
“Airlines are required to inform passengers about their rights. If an airline cancels a flight, they must provide each passenger with a written notice setting out the rules for compensation and assistance. A similar notice must be issued if a flight is delayed by more than two hours.”
“I’m also asking holidaymakers to ensure they have their free European Health Insurance Card before they travel. As an Irish resident you are entitled to get healthcare through the public system in an EU country if you become ill or injured while on holiday. But you must have a European Health Insurance Card or EHIC (formerly known as the E111). New or replacement cards can be obtained through the HSE.”
“As an EU citizen you have many benefits, but it’s vital that people ‘know before they go’. The European Consumer Centre (www.eccireland.ie) in Dublin provides details on all the various European consumer rights” concluded MEP Hayes
Hayes welcomes Central Bank action on variable mortgages
Brian Hayes MEP today welcomed the news that the Central Bank of Ireland would introduce measures that require banks to inform their variable mortgage holders every year about alternative products on offer. These measures were communicated to Mr. Hayes in a letter from the Governor of the Central Bank, Philip Lane, following his calls for simpler switching procedures.
“It is welcome that the Central Bank is carrying out these measures to improve transparency of variable mortgage products. The Central Bank sees that mortgage switching is a vital tool to a well-functioning mortgage market and the more they can do to ensure consumers have the right information about better mortgage offers the better.
“This will be the first time that banks will have to communicate annually a summary of alternative products on offer and publish on its website its policy for setting variable mortgage rates. It is important that this information is communicated to people in a clear and understandable way. Otherwise, customers are often left in the dark about the benefits of switching mortgage products or provider.
“However, I do still believe that the Central Bank needs to develop a specific code of conduct on switching. And I also believe that the government needs to bring in standalone legislation to establish a simple switching procedure, similar to what was done in Italy.
“We must recognise that there is still a great lack of competition in the mortgage market. Variable mortgage rates are still too high. We need to find ways to ensure that foreign banks can come into our mortgage market and compete with the current market players. To develop that competition, I believe that switching must be a key component of our mortgage market. We currently have very low switching rates and this keeps the market less competitive.
“In Northern Ireland there is approximately one mortgage provider per 180,000 people. In Great Britain there is approximately one mortgage provider per 700,000 people. In the Republic of Ireland there is one mortgage provider per 920,000 people. This shows the dominance of the five main lenders in Ireland.
“I believe we need to stimulate a more competitive mortgage lending environment, particularly with a view to encouraging reasonably priced long-term fixed rate mortgage products. In most other Eurozone countries, you can get a long-term fixed mortgage rate of 15 or 20 years for less than 3.5%.
“In Ireland, only Bank of Ireland offers a 10 year fixed rate mortgage. Other than that, there is hardly any competition in the mortgage market beyond rates of a 5-year duration. There is a culture of variable borrowing in Ireland and this will only change if competitive long term rates are available.”