Home Business EU told plot to punish London's City WILL backfire as Brussels heads...

EU told plot to punish London's City WILL backfire as Brussels heads on 'collision course'

Meanwhile Mr Dombrovskis‘ proposed digital tax would put the bloc on a collision course with the USA – and the UK would be well advised to steer clear of any similar proposal, Pieter Cleppe, a research fellow with the Property Rights Alliance think tank, said. European Commission vice-president Mr Dombrovskis, a former Prime Minister of Latvia, was last week handed the bloc’s trade portfolio after the resignation of Ireland‘s European Commissioner, Phil Hogan, in the wake of the “golfgate” controversy.

{%=o.title%}

]]>

Ignoring this also hurts European industry as it would impose more hurdles for them to obtain financing from London

Pieter Cleppe

Although officially he was only given the role on a temporary basis until Ireland nominates its replacement for Mr Hogan, the appointment will have caused some disquiet in London, given Mr Dombrovskis’ past remarks about the City.

Mr Cleppe told Express.co.uk: “Dombrovskis has been warning to cut off market access for the City.

“Basically ignoring this also hurts European industry as it would impose more hurdles for them to obtain financing from London.”

Boris Johnson will have the last laugh if Michel Barnier tries to punish the City, said Mr Cleppe (Image: GETTY)

- Advertisement -

Valdis Dombrovskis has responsibility for finance and – at the moment – trade (Image: GETTY)

On the subject of a digital tax, Mr Cleppe, who has expanded on his ideas in an article for The Critic website, added: “The EU’s move to tax digital services – and similar national taxes – are not only threatening innovation, it has also put the EU on a collision course with other partners (USA), as it changes the way corporates are taxed: no longer simply based on where their HQ is, but on where they make profit.

“Organisation for Economic Co-operation and Development [OECD] talks on this are going very badly.

“In the first place, big US tech firms often pay more corporate tax than old European manufacturers that have learned how to circumvent high European corporate tax rates.”

JUST IN: Leo Varadkar woe – failure to back Hogan was ‘an own goal’

- Advertisement -

Tech giants such as Apple could targeted by a digital tax (Image: GETTY)

In a message to Downing Street, Mr Cleppe added: “There have been rumours the UK would scrap such a tax, and I think that would be desirable, as UK should try to obtain a good trade deal with the US.

Speaking last month, Mr Dombrovskis suggested there was no guarantee the UK would get rapid access to EU markets after the end of the year.

He said: “In some areas we will not be in a position to adopt equivalence decisions.

DON’T MISS
Brexit news: Tory MP shames Labour MP after foul-mouthed rant [INFO]
Brexit panic: Shinzo Abe’s resignation puts UK’s bid [WARNING]
Brexit LIVE: Boris Johnson handed simple solution to break deadlock [BLOG]

The City of London is one of the world’s most important financial centres (Image: GETTY)

- Advertisement -

European Commissioner Phil Hogan resigned last month (Image: GETTY)

“Not all EU parameters are in place in these areas.

“Implementing rules are not yet in place.”

He also hinted at a need for the UK to negotiate individual deals with member states to retain access to mainland Europe on January 1, saying: “UK investment firms can have this access via national regimes.”

UN negotiator David Frost and EU counterpart Michel Barnier (Image: GETTY)

Speaking last week on the subject of “own resources”, the process which provides the EU’s main revenue, Mr Dombrovskis said the EU needed to tax companies which generated revenues with digital services because the money was needed to fund infrastructure and social programmes in the future.

He added: “We need to address the digital taxation, and we need to do it preferably internationally because especially the digital economy is quite globalised.

“With more digital economy it becomes also more of a challenge for our tax revenues to finance our infrastructure and social programmes.”

Boris Johnson is hoping for a trade deal with the US, led by Donald Trump (Image: GETTY)

Ray Bassett, Ireland’s former ambassador to Canada, Jamaica and the Bahamas, has said the proposed digital tax will also be viewed with unease in Dublin.

He said: “Once you give the EU the right to directly tax, then you are well on the way to a Federal State.

“I presume Martin, like all Irish politicians would be opposed to the EU gaining control of taxing the US Digitals, as it would adversely affect the Republic.

“However I fear that a weak Irish Administration and without the UK’s support might cave into Brussels.”

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisment -
%d bloggers like this: