I propose to take Questions Nos. 41 and 45 together.
The Deputy will be aware that the Commission proposal for an interim Digital Services Tax, which imposes a 3% levy on the turnover of certain companies’ digital activities, is currently being debated among Member States – both at a technical and political level.
The Revenue carried out an analysis of the impact of introducing a Digital Services Tax on corporation tax receipts and estimated that they would be reduced by around €160 million per annum. These findings were presented to the Committee on Finance, Public Expenditure and the Taoiseach in May of this year.
I recently reiterated Ireland's opposition to the proposal at ECOFIN on 6 November where I highlighted particular concerns I have regarding the negative consequences for Europe as a predominantly exporting bloc from creating a precedent of taxation at point of consumption rather than where value is created. I also pointed out that taxing revenue rather than profits would undermine European competitiveness and could intensify already heightened trade tensions.
While Ireland is among a number of Member States which object to the fundamental nature of the proposal, we are joined by a wider group which share our concerns on a series of technical issues yet to be resolved. Unanimity is required before the proposal could be agreed.
Ireland remains committed to global tax reform and believes that global solutions are needed to ensure tax is paid by companies where value is created. That is why Ireland has been a committed participant in, and strong supporter of, tax reform efforts led by the OECD through the BEPS process. Ireland will continue to actively engage with work in the area of the digital economy at both OECD and EU level.