Dáil Éireann Debate, Tuesday - 27 March 2018
74. Deputy Thomas P. Broughan asked the Minister for Finance his strategy on the EU Commission's proposals to tax digital revenues in each country of the EU; and if he will make a statement on the matter. [13626/18]
Amharc ar fhreagra121. Deputy Jan O'Sullivan asked the Minister for Finance his views on digital taxation in particular current developments in the EU; and if he will make a statement on the matter. [13621/18]
Amharc ar fhreagraI propose to take Questions Nos. 74 and 121 together.
On Wednesday 21 March last the European Commission published detailed proposal for two different Directives on taxation and digitalisation.
The proposals have been prepared by the Commission with limited input from Member States and we will need to study them in detail. The proposals will now be debated, discussed and amended by Member States working together in Council. Unanimity between all Member States would be required before either or both proposals can be agreed.
It is noteworthy that the recent OECD Interim Report on Tax Challenges arising from Digitalisation shows that a lot more work needed before a global consensus can be reached on the issue of tax and digitalisation. Ireland's support for reaching globally agreed solutions on tax issues is well known and longstanding. We have fully supported efforts at EU level to implement globally agreed BEPS recommendations but we have always been more cautious where the Commission have sought to rewrite international tax rules in a manner that moves away from the global consensus.
We believe any policy approaches must focus on value creation – tax should be paid where value is created, not simply where a transaction happens. Given minimum global tax introduced after US tax reform, the debate is not about “fair tax” – it is only about where tax is paid.
The OECD report did not make a recommendation on the introduction of short term measures because there clearly was no consensus on the merit or need for such action given the risks and adverse consequences that can arise following their introduction.
Further efforts should now be directed at delivering the analysis and evidence needed to achieve a globally agreed, evidence based solution, sustainable in the long run and focussed on aligning taxing rights with the location of real substantive value creating activity. It has long been our position that it has been the mis-match arising from different tax systems which has facilitated aggressive tax planning and the only sustainable way to address this is for countries to cooperate globally through the OECD.
Ireland will continue to actively engage with work in the area of the digital economy at both OECD and EU level. We have been a strong voice in the many tax directives that have been agreed at EU level in recent years and we look forward to critically assessing the Commission’s proposals in the context of the discussions at Council.
