#DigitalTax - 'Creidim go bhfeicfimid réiteach difriúil ón OECD in 2019' Donohoe in XNUMX

Following the meeting of European Finance Ministers (ECOFIN), Austrian Finance Minister Hartwig Löger said that ministers were still on track to reach a 'political declaration' on the EU's proposal for a digital services tax by the December meeting of the group, scríobhann Catherine Feore.   

Löger acknowledges that there were concerns arising from the Commission's proposal and that further work will be needed on technical details between now and December. One possible compromise that emerged is the suggestion - widely thought to have been proposed by the European digital taxes most ardent supporter, French finance minister Bruno Le Maire - to have an 'upside-down sunset clause'.  

The current 'sunset clause' proposes that the EU moves ahead with its tax, with the proviso that it will be subject to a sunset clause that will render it redundant when new OECD rules come into place. The  'upside-down sunset clause' would contain a proviso that the tax would be introduced should the OECD not come forward with a more 'global' proposal by a certain date.  

The Austrian Presidency are keen to make progress on this initiative by the end of their six-month presidency of the EU. At the very least, they hope that finance ministers can agree to a political declaration by the next ECOFIN in December. 

Danish Finance Minister Kristian Jensen raised his concerns on the way into this morning’s (6 November) meeting. Jensen said there does need to be a modern tax system that includes the digital giants. However, he said that this had to be done in a smart way.  

Aiseolas

Jensen said that what is being proposed is a quick fix - he said while he is in favour of quick solutions, it also must be a fix. Jensen favours an OECD approach and is concerned that there could be some retaliation from the United States, a major export destination for the EU.  

Jensen was wary of a tax based on where consumption is, rather than where profit is. He said it is not a good idea for Europe.  

Ireland has been one of the countries that has shown the most scepticism about the European Commission's proposed digital services tax. Following today's ECOFIN, Irish Finance Minister Paschal Donohoe said that other finance ministers echoed Ireland's concerns. He said that Ireland would work towards agreement addressing the technical considerations. 

He added that he thought there would be a different solution in 2019 and that would come from the OECD. He did recognize that how large techs are taxed needs to be addressed. When asked about other countries Donohoe cited the German minister (Scholz) who agreed that a global approach was the safest way to go forward. Donohoe also said he had great concerns that moving tax into where the consumption occurs, rather than where value is created, would set a precedent for exporting countries - especially countries with a larger services sector. 

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