Wednesday, May 21, 2008

Reading the treaty

Dick Roche, my local TD & Europhile in chief for the government, berates Irish Independent columnist Bruce Arnold for misrepresenting the Lisbon Treaty in his column from May 3. Roche asserts this to be the case because Arnold misread parts of Article 93 in the treaty.

Roche writes:
Mr Arnold makes much of an amendment to Article 93 of the treaty. He is correct when he says that the words "and to avoid distortion of competition" are to be added to the article.

But he is ignorant of two essential points. The first point is that the amended treaty article contains the words "The Council shall, acting unanimously".

This means every member state has the right to veto any proposal.

The second fundamental gaffe in Mr Arnold's article is his contention that the change he refers to would allow the Court of Justice to outlaw our current corporation tax rate.

The revised article refers to indirect taxes not corporation or any other form of direct taxation.
Well, this is how Article 93 will read after the Lisbon Treaty has been implemented:
The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition.
Okay, maybe Roche is right and this change cannot alter our corporate tax rates. BUT, the phrase turnover taxes is in there and they can no be changed (imposed?) in order "to avoid distortion of competition".

I'm no tax scholar or lawyer (which is the biggest problem with this treaty nonsense), so maybe I'm way off, but my layman's interpretation of turnover taxes is that they are imposed during the various stages of production. So, maybe the EU cannot change our corporate tax rates, but they can do equal amounts of damage with taxes imposed on production.

The Court of Justice might decide that we're 'distorting competition' by NOT taxing software or financial services partly produced and/or provided here. Such a ruling could have the same effect as changing the corporate tax rates. Maybe? I don't know, but perhaps Mr. Roche will honor me by showing me where in the Lisbon Treaty this is ruled out.