Niall Collins (Limerick County, Fianna Fail)
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59. To ask the Minister for Finance if he will provide an overview of the accelerated capital allowance scheme for crèches and gyms as published in the Action Plan for Jobs 2018 that has been submitted to the European Commission for state aid approval. [12736/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Finance Act 2017 introduced a scheme of accelerated capital allowances for the construction of buildings and structures for use in the provision of childcare services or fitness centre facilities by employers to employees. The scheme also provides relief for expenditure incurred on related equipment.

The rationale for introducing the relief is to help tackle the cost and availability of childcare facilities, both of which have been cited as barriers to work. The measures will also support the Government’s vision for a healthy Ireland by supporting the provision of fitness facilities by employers.

The tax relief will not commence immediately as approval of the European Commission from a State Aid perspective is required, on foot of which the scheme will commence by Ministerial Order.

The relief will work in a similar fashion to other capital allowances. The accelerated allowances for buildings or structures will apply at the rate of 15% per annum for 6 years and 10% in year 7 in respect of qualifying expenditure. The wear and tear allowances for related equipment are at an accelerated rate of 100%.

The relief is only available to employers who incur qualifying expenditure, meaning that, unlike in the past, passive investors cannot avail of relief under the scheme. Where the employer is a company, employees of other companies connected with that company may avail of the services/facilities.

Niall Collins (Limerick County, Fianna Fail)
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60. To ask the Minister for Finance his views on proposals by the European Commission to introduce an EU wide digital services tax which would possibly threaten Ireland’s industrial policy for retaining and attracting foreign direct investment; and the steps he and his ministerial colleagues are taking at EU Council level to ensure Ireland’s interests are protected. [12981/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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It is my understanding that the the European Commission will bring forward proposals on Digital Taxation on 21 March. It would be premature of me to comment in advance of the publication, let alone the discussions which must take place among Member States.

We believe that further analysis is needed to achieve a globally agreed, evidence based solution, sustainable in the long run and focussed on aligning taxing rights with the location of real substantive value creating activity.  It has long been our position that it has been the mis-match arising from different tax systems which has facilitated aggressive tax planning and the only sustainable way to address this is for countries to cooperate globally through the OECD.

I note that the OECD Task Force on the Digital Economy Report published on 16 March sets out their process for further work on a long term proposal while the report is quite clear that there is no consensus at international level on the need for, or indeed merits of, any short term tax measures in this regard. The Report acknowledges that short term measures are likely have adverse impacts on investment and growth and risk increasing double taxation and complexity for taxpayers and tax authorities alike.

Ireland will continue to actively engage with work in the area of the digital economy at both OECD and EU level.  We have been a strong voice in the many tax directives that have been agreed at EU level in recent years and we look forward to critically assessing the Commission’s proposals in the context of the discussions at Council.