Dáil Éireann Debate, Tuesday - 27 November 2018
155. Deputy Pearse Doherty asked the Minister for Finance the revenue raised by introducing a digital services tax of 1%, 2% and 5% respectively on digital services firms with turnover of €50 million or over here and at least €750 million globally. [48962/18]
View answerIt is assumed that the scope and design of the Digital Services Tax (“DST”) to which the Deputy refers would mirror those of the European Commission’s initial DST proposal.
The Commission, in an impact assessment of its proposed DST – which applies at a 3% rate – estimated that the measure would yield approximately €5 billion per annum across all EU Member States. If it is assumed that Ireland would receive a portion of the yield in proportion to Ireland’s population, the estimated annual yield in Ireland from the EU proposal would be €45 million.
The impact of the DST if the rate were varied can be estimated on a pro rata basis. The table below shows the estimated yield side.
|
Rate |
Estimated DST Receipts |
|
1% |
€15 million |
|
2% |
€30 million |
|
3% |
€45 million |
|
5% |
€75 million |
When considering the impact of a DST potentially introduced across the EU a whole, it is important to note that DST paid in other countries is likely to be deductible in calculating profits subject to corporation tax (“CT”) and this would reduce Ireland’s CT receipts disproportionately. Based on an analysis carried out by the Revenue Commissioners, introducing the EU DST at a rate of 3% would reduce Ireland’s CT receipts by up to €160 million per annum, assuming full deductibility from taxable corporate profits for DST paid in the EU by companies taxable in Ireland. These findings were presented to the Committee on Finance, Public Expenditure and Reform and the Taoiseach in May of this year.
