Wednesday, 16 May 2018

Ceisteanna (45)

Joan Burton

Ceist:

45. Deputy Joan Burton asked the Minister for Finance the contact he has had with other EU Finance Ministers regarding the proposed EU digital tax; and if he will make a statement on the matter. [21286/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Deputy will be aware that on 21 March the European Commission published two proposed Directives which seek to tax certain digital activities differently within the EU. One, a ‘temporary’ solution for a 3% levy on turnover from certain digital service activities. The second, "comprehensive solution" requires an overhaul of international taxation, establishing the concept of a "digital permanent establishment", allowing countries taxing rights over the digital business carried out by a company in that country, even where that company has no physical presence there.

Ireland is strongly committed to global tax reform and believes that global solutions are needed to ensure tax is paid by companies where value is created. It is important that we have a system of taxation which is appropriate to meet the challenges and opportunities of a changing world. Therefore I welcomed the opportunity to discuss the proposals with my EU counterparts at the Informal ECOFIN meeting in Sofia on 27-28 April.

There was a healthy debate among my fellow Ministers. While it is clear that there is widespread support for a global solution, Ministers remain divided on the need for independent EU measures, particularly the interim proposal which many Member States see as being flawed. Unanimity is required before any EU tax proposal can be agreed.

I took this opportunity to outline the concerns we have with the proposals. If adopted in their current form, it would result in a significant shift in how corporate tax is paid and may have unanticipated negative consequences for EU MS and companies. Therefore it is important that these proposals are properly considered and analysed. 

We need to be careful about introducing novel concepts which could fundamentally alter the model upon which companies are taxed. It is important to be aware of how any unilateral EU measure would be perceived outside of Europe.  An EU Digital Services Tax could embolden other jurisdictions to introduce similar measures of their own, jeopardising the likelihood of achieving a global solution.

Ireland will continue to actively engage on these matters with our fellow Member States and at OECD level so that we have a system of international taxation which is appropriate to meet the challenges and opportunities that arise from the digitisation of the economy.