The Green Party has backed a proposal to remove Ireland's veto on tax issues in the EU.

Ireland's two Green MEPs, Ciarán Cuffe and Grace O'Sullivan, voted in favour of a European Parliament amendment this week to introduce qualified majority voting on tax matters at the European Council.

The Irish Government has long opposed this as it fears that by removing the national veto - and allowing the council to make decisions on tax without a unanimous vote of member states - would put the State's highly competitive 12.5pc corporation tax rate at risk.

While the amendment did not pass, Mr Cuffe said: "The point it was making, that unanimity in the council has prohibited needed reform on tax - Ireland being one of the countries blocking measures - is valid.

"Corporation tax take has been falling within the EU and we are worried that there has been a race to the bottom in rates of corporate tax as member states compete with each other."

He said the Greens want to send "a signal" to the Irish Government that "business as usual is not an option" and which said it was "desirable" that there be a common consolidated corporate base to ensure common tax rules across the EU.

"We have to ensure greater transparency in the Irish Government's tax policies and ensure that tax evasion and avoidance are tackled," he said.

Mr Cuffe said he and Ms O'Sullivan abstained on a vote giving the EU powers to set specific corporation tax rates. Independent MEPs Clare Daly and Mick Wallace voted in favour of this proposal, which would enforce a minimum effective corporate tax rate of 20pc across the EU.

Fine Gael MEP Frances Fitzgerald criticised the votes from the Green and left-wing MEPs.

"This is effectively giving up sovereignty and control when it comes to tax policy. It could have the most serious implications on tax policy and could be devastating for Ireland," she said.

"While we welcome the initiative to begin discussions on tax fairness in the parliament, it is a complex issue, evidenced by the continuing deliberations at OECD level to find a solution for the fair taxing of digital companies."

Irish Independent