Ireland will not have to use veto in EU digital tax row - Donohoe

Finance Minister: ‘Competitiveness should not be prerogative of larger countries only’

Minister for Finance Paschal Donohoe said he was working with Nordic countries to form a deeper understanding on issues in which we have a common interest. Photograph: Dara Mac Dónaill

Minister for Finance Paschal Donohoe said he was working with Nordic countries to form a deeper understanding on issues in which we have a common interest. Photograph: Dara Mac Dónaill

 

Minister for Finance Paschal Donohoe has expressed confidence that Ireland will not have to use its EU veto to block the controversial European Commission proposal on digital tax.

Mr Donohoe said Ireland had been an EU member for over 40 years and had never had to wield its veto in that time.

“We have done that because we have formed alliances on areas of common national interest and I’m confident and know that this approach will work in relation to dealing with this matter too,” he said.

He said the competitiveness of small countries was always under focus and “I deal with that on a continual basis”.

But he said “competitiveness should not be the prerogative of larger countries only”.

France and Germany support the proposals to impose a 3 per cent tax on digital companies with online revenues.

Up to €5 billion a year could be collected in taxes from tech companies on the basis that digital companies pay far less tax than traditional businesses.

Big companies such as Google and Facebook have their EU headquarters in Ireland.

The Minister said on RTÉ Radio’s This Week that because the UK was leaving the EU “we have always said this is going to change the dynamic in relation to negotiation in a number of key areas”.

That was why he had been “working with Nordic countries in an accelerated manner to form a deeper understanding on issues in which we have a common interest”.

Mr Donohoe said the Government had indicated to all the tech companies, and 10 other EU countries had taken a similar stance that “it should be done on a global basis”.

He said the OECD had created a template “to allow corporate tax reform to take place which Ireland has followed and we’re indicating that we believe this is the right forum in which reform of digital taxation should take place”.

“To take any other approach would cause great difficulty for Ireland and exacerbate the growing difficulties in relation to growing trade.”

The Minister also said that “Ireland has a very good story to tell on corporate tax reform. It’s one we don’t get enough credit for.

“We are in the process of eliminating the double Irish. We have eliminated stateless companies from our corporate tax code

“We’ve received the highest rating possible from the OECD on the transparency of our corporate tax code.”