Varadkar opposes Macron tax plan

Taoiseach Leo Varadkar insists Ireland’s tax rate for internet giants based in this country remains “a national competency” and must not be decided on an individual country-by-country basis by anyone else in the EU.

Mr Varadkar made the comment after a one-hour bilateral meeting with French President Emmanuel Macron at the Élysée Palace in Paris, during which Mr Macron specifically raised the need to impose new taxes on internet firms.

At a European Commission meeting in Brussels last week, Mr Macron put forward plans to hike taxes for tech giants such as Google, Amazon, Facebook, and LinkedIn to force them to pay the same amount to a state regardless of where they are based.

The move will be formally proposed by France at a commission meeting early next year and has been backed by a number of EU nations.

Ireland, and other smaller countries whose employment levels are increasingly based on being able to attract internet firms due to lower tax rates, oppose the plan due to the impact it could have on their economies.

After the meeting with Mr Macron, Mr Varadkar said while he does not think now is the time “to be threatening vetoes”, Ireland will not accept the measures.

He argued instead for an OECD-led international review of digital taxes, which would take two years instead of beginning immediately and would affect every country in the world instead of just Ireland and smaller nations, watering down the risk posed by the changes.

Mr Varadkar said it is important to keep in mind any move that focuses simply on EU countries could damage the union.

“We agreed last week that we would welcome proposals from the European Commission early in 2018, and I look forward to seeing what plans they have,” said Mr Varadkar.

“But it’s very much the view of the Irish Government and lots of other countries. What we need here is a global solution that’s best done through the OECD based here in Paris through French leadership. Because what we don’t want to do is impose a new tax on internet companies that actually benefits non-EU countries — that would be totally counter-productive.”

Asked if national digital tax levels would be decided by external forces, as suggested by Mr Macron, Mr Varadkar said: “As far as we’re concerned, tax remains a national competency. I don’t want to be threatening vetoes, that’s not the best way to engage in European diplomacy and I think we should try to come to an agreement.

“But I think our strong view is that the best solution is an international OECD one [that would affect all countries worldwide and not just Ireland].”

Meanwhile, Mr Varadkar welcomed Mr Macron’s comments that it is up to Britain to put forward Irish border solutions that remain “at the heart” of EU discussions.

Mr Macron noted that after “the Brexit”, France will become “Ireland’s closest EU member”, saying “that is not abstract, we want to strengthen bilateral co-operation”.

Mr Macron also confirmed that he will visit Ireland next year.

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