Digital tax would hand advantage to US and UK, Varadkar says

Draft conclusions of meeting urge EU to ensure all companies pay fair share of taxes

Leo Varadkar     in Brussels on Thursday: “The position of Ireland.. is that if we are going to do anything on digital taxation, we should do it on an international basis through the OECD.” Photograph: Julien Warnand/EPA

Leo Varadkar in Brussels on Thursday: “The position of Ireland.. is that if we are going to do anything on digital taxation, we should do it on an international basis through the OECD.” Photograph: Julien Warnand/EPA

 

The Taoiseach Leo Varadkar has stressed Ireland’s opposition to any moves to introduce common rules on taxation of digital revenues at an EU level.

Draft conclusions of Thursday’s meeting urged the EU to “ensure that all companies pay their fair share of taxes and to ensure a level playing field”.

However, Ireland sought a change to the draft and secured a reference to a “global level playing field” – a change that officials said was significant as it oriented the conclusions towards the OECD process, rather than an EU-centric model favoured by some big members states, including France.

Speaking to journalists before he went in to the summit, Mr Varadar said: “The position of Ireland . . . is that if we are going to do anything on digital taxation, we should do it on an international basis through the OECD. If we introduce a digital tax in the EU, rather than collecting any tax, we might just hand an advantage to America, to Japan, and to the UK, which is leaving.”

Mr Varadkar said a lot of EU countries shared Ireland’s view, “particularly smaller northern European countries, and some countries in the Mediterranean as well”.

Eighth Amendment

Mr Varadkar also said he believed the committee on the Eighth Amendment would be able come to an agreed conclusion on its recommendations to Government.

“What I’d like to do really is to wait until the committee comes with its conclusion in December,” he said. However, the fact that they had started taking votes indicated that they can meet the December deadline to agree their conclusions.

He said the Government would then take the issue forward in the new year.

“ But I want to be very careful not to be directing them in any way – or be seen to direct them in any way. It is an all party committee. We would like to have as much and as broad consensus as is possible, and I want to give them the opportunity to hear all the evidence before coming to their final view,” Mr Varadkar said.

Asked if the Government was “powerless” to force banks to compensate customers who had been wrongly forced off tracker mortgages, Mr Varadkar said that the approach of calling in the banks and impressing the Government’s view on them had worked before.

“I know former taoiseach Enda Kenny and Michael Noonan called the banks in on mortgage arrears and you’ll know mortgage arrears have been falling very substantially in Ireland in recent years. In fact, it won’t be long before mortgage arrears in Ireland are at the EU average. So I wouldn’t agree with the view with them being called in the past hasn’t been effective,” he said.

“But we’ll see what happens next week. I’m certainly open to new laws and new regulations, or additional taxation – but all those things would take too long. The banks have it in their power to sort this out in a matter of months. Legislation and new sanctions would take longer. And I really think the banks have prevaricated and dragged their feels for far too long now. The message is clear – they really need to get on with it and sort it out.”