THERE IS NO doubt that Ireland has benefited from the presence of multinational tech giants like Google, Apple and Facebook in the local economy.
However Ireland Inc is worried that an EU plan to slap a blanket sales tax of up to 5% on the dominant digital companies’ sales would deliver a direct hit to the Exchequer.
As explained by Fora last week, a move to levy tech giants’ European revenues where they are generated rather than profits where they are declared is expected to strip the Republic of some of its windfall corporate tax revenues.
There is also a question mark over whether the move would deter US firms, in particular, from investing in Ireland, creating a knock-on effect when it comes to employment here.
The Sunday Business Post reported Irish officials have been courting the support of the Trump administration in fighting the plan, while the government is also rallying like-minded EU member states to oppose the proposals.
Nevertheless, the EU argues the measures are needed to stop tech companies siphoning their profits to wherever they can get the most favourable tax treatment, a situation European officials say is unfair on traditional or smaller businesses that don’t employ the same structures.
At its extreme, these tactics can result in situations like Apple shaving its European tax bill to less than 1% of its profits, as highlighted in the European Commission’s €13 billion state aid case against the tech giant and Ireland.
With that in mind, we’re asking Fora readers this week: Do you agree with plans for a European tax on tech giants’ income?