Wednesday 25 April 2018

Donohoe set for fight with EU 'Big Four' on tech giant tax plans

Finance Minister Paschal Donohoe. Photo: Collins
Finance Minister Paschal Donohoe. Photo: Collins
Niall O'Connor

Niall O'Connor

Finance Minister Paschal Donohoe is among a number of senior EU figures who have expressed serious reservations over plans for a tax blitz on the revenues generated by internet giants such as Amazon and Facebook.

Mr Donohoe voiced serious concerns about the proposals at a meeting in Tallinn, Estonia - placing him and other finance ministers on a potential collision course with the so-called EU 'Big Four': France, Germany, Italy and Spain.

The proposal, if adopted, would see the introduction of a tax on the revenues of major technology firms - instead of just their profits.

French Finance Minister Bruno Le Maire told colleagues at the meeting on Saturday that the new tax on the digital industry should be introduced by mid-2018 as a matter of fairness.

Ten countries, including the other three EU powerhouses Germany, Italy and Spain, have formally backed the initiative.

But eight others have reservations - with Denmark expressing similarly strong reservations to those voiced by Mr Donohoe.

France has proposed a temporary levy on the revenue generated by multinational companies in the technological sector.

The French government, led by President Emmanuel Macron, is pushing for such a measure because taxing profits is complicated under international rules.

It was accepted at the meeting in the Estonian capital that implementing such a policy could take years.

Ireland will open itself up to accusations that it is trying to protect internet giants who have set up their bases here by opposing the French-led plans.

Senior Government sources last night played down reports that Mr Donohoe was leading the opposition, saying that the proposals need to be carefully scrutinised.

The same sources said Mr Donohoe is of the view that the proposals to target the revenue of technological giants would need to also include the US and other big countries.

Speaking to reporters following the meeting, Mr Donohoe said that "the very, very considerable difficulties in taxation of this sector" became evident.

But he confirmed that there were "very big questions about how such a measure could be implemented".

According to Bloomberg, Danish Finance Minister Kristian Jensen warned that a European tax could risk driving business abroad, saying he is "sceptical".

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business