Dáil Éireann Debate, Tuesday - 27 July 2021
350. Deputy Ged Nash asked the Minister for Finance the expected yield from introducing a digital services tax on the same basis as France, Italy and Spain with a 3% tax rate (details supplied); and if he will make a statement on the matter. [39904/21]
View answerAlthough the Digital Services Taxes introduced in France, Italy, and Spain are not precisely the same as each other, all three share substantial overlaps with the Digital Services Tax proposed by the European Commission in 2018. When making its proposal, the Commission estimated that an EU-wide Digital Services Tax could yield €5 billion per annum, to be shared between all EU Member States, based on levels of activity in Member States.
It would be reasonable to assume that Ireland’s share of that estimated yield could be calculated in proportion to the population of Ireland as a share of the population of the EU overall. Eurostat has estimated the population of Ireland to be 0.9% of the total population of the EU. Applying this to the Commission’s overall estimated yield would mean that Ireland could collect approximately €45 million from introducing a Digital Services Tax of the type mentioned. The net yield would be reduced to the extent that deductions from company profits for Digital Services Tax paid would reduce corporation tax receipts.
The European Commission’s proposal was based on (1) a €750 million global revenue threshold and (2) an EU-wide €50 million revenue from in-scope services threshold. Based on available data, it is not possible to estimate the potential yield of a Digital Services Tax with different thresholds. It should be noted also that the ongoing Pillar One work of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting will provide for the removal of Digital Service Taxes and other similar measures across the world. I have expressed support for that Pillar.
