Saturday 23 June 2018

Brussels drives ahead with tax plans despite Irish opposition

Finance Minister Paschal Donohoe. Photo: Tom Burke
Finance Minister Paschal Donohoe. Photo: Tom Burke
Donal O'Donovan

Donal O'Donovan

The European Commission wants to proceed with an overhaul of taxes on digital firms even if the rest of the rich world won't follow suit, a draft report said.

The Irish Government has consistently rejected such moves, including as recently as yesterday. Despite that - and rules that EU tax changes can't go ahead without the support of all member states - the Commission is pushing to tap more revenues from online multinationals such as Amazon and Facebook.

The draft report, which could be adopted as Commission policy today, said older bricks-and-mortar multinational pay twice the tax in the EU that their digital competitors do.

Here, Finance Minister Paschal Donohoe repeated yesterday that taxing the digital sector should be examined at Organisation for Economic Cooperation and Development (OECD), not EU level.

Ireland won't not give up its veto over tax affairs, despite Commission President Jean-Claude Juncker calling for the unanimity requirement to be scrapped.

"Our view is that tax is a matter of member state competence and that unanimity should remain.

"This has been a long-standing approach of Ireland, and indeed many other member states, and there is and will be no change in that policy," Minister Donohoe said.

The draft Commission report says the best way to tackle tax distortions is to review the notion of "permanent establishment" so that firms are taxed in countries where they do not have a physical presence, a move that would boost the tax take of big countries at the expense of Ireland and other small exporters. (additional reporting Reuters)

Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business