The low level of taxes paid by major tech companies headquartered in Ireland came under fresh attack yesterday from France’s finance minister, who said the regime must change.
Bruno Le Maire “differed” with his Irish counterpart Paschal Donohoe in a bilateral meeting as to how big tech companies should be taxed.
“It has always been the view of France, the key point for us to find a permanent international solution as soon as possible,” said Mr Le Maire. “As far as corporate tax is concerned, we believe in the necessity of bringing in a minimum level of corporate tax at international level. It remains the French position. We have the support of Germany on that key issue.”
France has led the charge for such taxes on companies such as Google and Facebook to be increased, but the Government has strongly resisted any moves to impose harmonised tax rates.
The European Commission proposed in March 2018, with France’s backing, that digital giants be taxed on three sources of income: Exploitation of data, advertising revenue, and sales on digital platforms. Ireland is one of four EU countries which remains opposed to the proposal.
Yesterday, Mr Donohoe did agree to explore possible future solutions through technical talks at OECD level.
However, following a bilateral meeting, the gulf between the Irish and French governments was laid bare.
“What we have agreed is that while we do differ on some particular areas, we are going to see how we can progress this matter through the OECD and how we can find a global solution.”
Mr Le Maire made it clear that change is urgently required.
“In terms of digital taxation, like all good friends, we have agreements and we have disagreements,” he said. “Digital taxation does need to change. That is exactly the French position. We need a fair taxation of digital activities.
“We need an efficient taxation of digital activities and we cannot accept our small and medium-sized businesses paying 14 points more in taxes than the internet giants,” he added.
When pressed by the Irish Examiner, Mr Donohoe insisted that while differences do exist on digital taxation but also on corporation taxation, the debate is being conducted in a spirit of friendship.
“We are friends, we agree on much,” he said. “Both of us acknowledged as colleagues that we do have some differences in relation to digital taxation and we have broader differences, between the minister and me, in relation to corporation tax.
“But what we did agree on, to work on what we have in common. That is why we can look at working better within the OECD”.