Digital tax could reduce Ireland’s corporate take
Warning comes as France pushes ahead with 3% tax on digital revenues
US president Donald Trump: Washington has threatend to retaliate with sanctions. Photograph: Evan Vucci/ AP
He was speaking in the wake of France’s unilaterally move to push ahead with a 3 per cent tax on the revenues companies earn from providing digital services to French users.
It would apply to digital businesses with annual global revenue of more than €750 million and sales of €25 million in France. The UK and Austria have pledged to adopt a similar measure amid threats from the US to respond with trade sanctions.
If a groundswell of countries adopt a digital tax, the Irish Government, which has traditionally supported an OECD-led approach inclusive of the US, could be left isolated.
“Foreign Direct Investment (FDI) tends to be a choice between locations. The UK is a big competitor for FDI. Introducing a digital tax is unlikely to improve their position,” Mr Tynan said.
“If it becomes widespread, it could make the EU less attractive but I don’t think it would have a significant impact as it will still be an important market,” he added.
On the likely impact on companies here, Mr Tynan said: “If it operates across Europe, it will reduce the Corporate Tax take in Ireland, if everything else stays the same”.