Ireland Backs Away from EU Digital Tax

May 2, 2018 Taxation in Ireland

Digital tax in the EUDUBLIN – Ireland stands to lose out on tax revenues if the EU goes ahead with a proposed EU-wide digital tax.

Irish authorities have heard evidence indicating that a newly proposed pan-EU tax on digital revenues could have a significantly negative impact on tax revenues in the country.

The new tax would see large multinational online businesses charged a 3 percent tax on revenues earned from users in the EU.

The tax would be paid to the government of the country in which the users live.

Currently, large online businesses do not pay taxes based on the location of their users, but, instead, on the location of the registered offices.

The current system has driven businesses to register in low-tax areas such as Ireland, despite making the bulk of their profit in other countries.

The government of Ireland believes that the new tax could see a revenue drop for the country of between EUR 120 million and EUR 160 million, while in return the tax would lead to collections of only EUR 45 million.

The tax will be applied only to companies with a worldwide revenue level of EUR 750 million and EU-specific revenues of EUR 50 million.

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