Sunday 22 September 2019

Gavin McLoughlin: 'It's a good day for Donohoe but future digital tax reform still hasn't gone away'

 

Finance Minister Paschal Donohoe. Photo: Mark Condren
Finance Minister Paschal Donohoe. Photo: Mark Condren
Gavin McLoughlin

Gavin McLoughlin

Paschal Donohoe must have been feeling pretty pleased with himself yesterday.

Despite efforts to put a gloss on things by French finance minister Bruno Le Maire, it's hard to see a way back for the digital tax proposal now, particularly after Germany said it should be delayed until summer 2020 and even in that case only imposed if a global solution hasn't been reached.

Mr Donohoe's language after the meeting was interesting. Speaking to reporters he preferred not to say whether he would do anything so churlish as use his veto against the proposal.

He won't need to now.

Instead he spoke of Ireland's desire to work with our European partners - while simultaneously making it clear that he felt the digital tax was a matter to be looked at by the OECD.

But whenever the OECD proposals emerge - and they may finally have done so by the summer of 2020 to which Germany was looking - Ireland is still exposed to change on this matter.

If the OECD takes the view that tech companies should pay some of their tax where users are located, rather than where companies are based, Ireland could face a very uncertain future.

But that particular battle is a little bit further down the road. Indeed, in a roundabout way, yesterday's meeting could help in another, more pressing battle. Recently, the worrying prospect emerged that support for Ireland on Brexit could be linked to whether we caved in to the digital tax plan.

The idea has been put forward by mysterious, anonymous officials in a number of reports - but it's probably dead now.

Just the rest of Brexit to sort out, then.

Irish Independent

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