Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

There are two reasons why I am not in a position to accept this amendment. The first is the amount of work I and my Department have already done to try to meet the need to which this amendment refers. Officials from my Department and the Revenue Commissioners have appeared before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. On foot of those appearances we have already submitted a report to the committee laying out the different issues Ireland would face if this measure was implemented. I contend we have already done the report for which this amendment calls.

The second reason is that the taxation of the digital economy sector will change in the future. It is going to change in the same way as we have seen how other forms of corporate activity are taxed. The key point is how that change can happen in the safest way for Ireland. A change in tax policy that creates a trade risk is a big challenge for a small open trading economy such as Ireland. To avoid that happening, it is safer for our country and economy that agreement on this issue be reached with key trading partners, such as the United States of American and Japan, so that they have an opportunity to reach agreement with Europe on new ways to tax this sector.

Absent that, my great concern is that we could see Europe and Ireland going in one direction and then our trading partners deciding to respond in turn. That is quite a vista for us to have to face into. My view on this is clear. Taxation of the digital economy will change. The proposal from the European Commission, however, does not deal with issues such as how it would interact with national taxation measures. It does not deal with how exporting countries could be given comfort in respect of shifting the tax incidence into markets of consumption as opposed to where the value is created. For those reasons, I believe it is a safer venue and avenue for these matters to be dealt with by the OECD. On this amendment, as I discussed with Deputy Burton on Committee Stage, I have already supplied the key information for which this amendment calls. I am not, therefore, in a position to accept this amendment.

See this speech in context