Joan Burton (Dublin West, Labour)
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14. To ask the Minister for Finance the discussions he has had with the EU member states and the European Commission in respect of proposals on the development of a digital tax; if he has been consulted by EU member states on digital tax proposals; his assessment of the impact of such a tax on Ireland; and if he will make a statement on the matter. [7362/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy will be aware that the Commission proposal for an interim Digital Services Tax, which imposes a 3% levy on the turnover of certain companies’ digital activities, was discussed extensively last year among Member States – both at a technical and political level.

In December the proposal was brought before ECOFIN for political decision where it was clear that a number of Member States did not support its adoption. At the meeting, France and Germany unexpectedly tabled an amended proposal which in essence restricted the scope of the proposal to cover only digital advertising. My fellow Ministers and I agreed that we would need time to assess this new proposal and would return to the matter once we had done so.

I have had various conversations with my fellow Ministers about the proposal and the December ECOFIN was held in public session. I expect that the issue will again be discussed by Ministers at the March ECOFIN.

The new proposal fails to address the principled concerns I have consistently expressed about a proposed EU Digital tax – principally that it is based on taxing revenues rather than profits. In fact, the restricted nature of the proposal merely intensifies the concerns that this could be perceived as targeting specific companies and has the potential to aggravate tensions in the international trading arena. While the Directive has therefore not been agreed, a number of Member States have announced that they are moving ahead with their own plans for domestic digital taxes.

It should be recalled that all EU Member States support solutions for taxation of the digital economy to be reached globally at the OECD, and I do not believe that Europe should move ahead of or in a different direction to the work being done at OECD. This work is well under way and a public consultation is now underway giving stakeholders a chance to contribute to this work.