Commission Proposals for Taxation of Digital Economy a knee-jerk response

21st March 2018

Joined up approach across OECD economies a better route to take

Chambers Ireland today (21 March 2018) commented on the European Commission’s legislative proposals on digital taxation, published today prior to the Spring European Council meetings this week.

Speaking following the publication of the proposals, Chambers Ireland Chief Executive Ian Talbot said,

“Today’s announcement of the proposal for a Digital Tax of 3% on revenues of large digital companies could have a significant impact on technology companies in Ireland.

Chambers Ireland has previously welcomed the recommendations from the OECD on tackling tax avoidance through international tax reform, including taxation of the digital economy, as highlighted in their Base Erosion and Profit Shifting Report (BEPS). Globally agreed international reforms to corporate taxation will provide increased certainty to multinationals operating across many different jurisdictions and tax administrations.

Any EU actions to depart from international tax norms could not only undermine Ireland’s competitiveness, but the EU’s as a whole. This looks like a knee-jerk reaction which is also likely to have unintended consequences. Unilateral changes to tax rules are likely to create, not reduce, tax arbitrage opportunities.

Although we have seen strong economic growth in recent years, it must be emphasized that Ireland remains a small open economy, vulnerable to global economic shocks and the consequences of Brexit. Global solutions are required for the global economy we operate in.”