Dr. Tom McDonnell:

For sure. Effective tax rates paid by these companies can be very low. The initial idea behind digital services levies were that they would allow the use by companies, often American companies, of tax havens within the European Union to be tackled. Some European countries were implicated and there was a push by France and other countries to find an alternative way to tax them. If it could not be done through corporation tax, they would introduce a digital services tax or levy as an alternative way to catch them. Ireland pushed back against that because these companies tend to be based in Ireland. If they pay a digital services tax, that will reduce their corporate profits, which would mean lower receipts for Ireland. It might also disincentivise them from increasing their footprint in Europe, full stop.