After a meeting in Paris, Macron and visiting Irish Prime Minister Leo Varadkar admitted they had failed to reach agreement on how to ensure that tech titans pay more tax in Europe.
Varadkar, who like Macron is part of a new, younger generation of EU leaders, said the issue of how best to tax internet firms “so that they pay their fair share” was among those on which the two “don't necessarily agree”.
While saying both he and Macron wanted Europe to take advantage of the digital revolution and promote innovation, the Irish remained convinced that a global — rather than an EU — solution was needed to stop tech tax avoidance.
Emmanuel Macron with Irish Prime Minister Leo Varadkar. Photo: AFP
At an EU summit last week the two men reportedly clashed on the issue with Varadkar standing by the view of Ireland, Luxembourg and a handful of other small countries that such a tax would deter investment.
Macron, who has been pushing hard for harmonised tax rates among EU members, acknowledged at the end of the summit last week that these member states could lose out.
“Some states will perhaps lose out in the short-term, marginally, because they've built models based on this (low corporate tax rates),” he told reporters on Friday.
But he insisted that the US tech giants known as GAFA — Google, Amazon, Facebook and Apple — would not leave the EU market of 500 million wealthy consumers if they were forced to pay higher taxes.
Macron agreed Tuesday that further discussions with Varadkar in person had been “inconclusive”.
France needs the backing of all EU members to achieve its tax goal which requires unanimity of all 28 states.
The meeting between Macron and Varadkar was the first between the two youthful leaders since they both took office this year.
Macron backed Varadkar on Brexit, saying it was up to Britain to resolve the issue of its border with Ireland after it leaves the EU.
“It's up to the United Kingdom to propose concrete solutions to minimise the impact of Brexit on the border between Ireland and the United Kingdom,” Macron said.
The issue of the border between Ireland and Northern Ireland — the only land border the UK will have with the EU after Brexit — is a top priority in the negotiations between Brussels and London, which began in June.
There are fears the return of a “hard” border would disrupt the fragile peace in Northern Ireland, which was plagued by three decades of unrest until a 1998 peace deal.
Varadkar thanked Macron for his “solidarity” in “doing all that we can to ensure there is no return to a physical border on the island of Ireland.”