US tech giant Amazon warned the Government that the Trump administration could consider a levy on streaming companies as a “further tax” on US firms.
The Irish Government decided last month not to go ahead with a "Netflix levy", which would target the revenues of large telecommunications companies, broadcasters and global streaming giants, and recycle the funds to support domestic content production.
It has since emerged that expert advice commissioned by Coimisúin na Meán argued in favour of introducing such a levy on a sliding scale – but the Government held off, citing a belief that the costs would be passed to consumers.
Records released under Freedom of Information laws show that Amazon’s head of public policy Ed Brophy and another executive from the firm’s Prime streaming service held a meeting with Minister for Arts and Media Patrick O’Donovan in February of this year.
Mr Brophy, who is a former senior adviser to then Labour Party leader and tánaiste Joan Burton, before moving on to work for Minister for Finance Paschal Donohoe, also wrote to Mr O’Donovan following his appointment in January.
The records show that Amazon told the meeting that Ireland’s tax incentives “are the envy of many other territories”, and also complemented skills development in Ireland in recent years.
The company also raised the content levy, which had not been decided on at that stage, saying that it operates in some countries that have a levy, including Denmark – where its investment “has declined partly because of the levy”.
It says that there was a “fear Ireland could become less competitive and strongly cautioned Mr O’Donovan to consider potential knock-on effects”. Sweden, meanwhile, had gained investment as a result of not introducing a levy, Amazon argued.
“Amazon also noted that Ireland competes with the UK which doesn’t have a levy and there is a risk it could harm competitiveness, undermining the positive incentives Ireland has introduced.
“Amazon also considered that the US government might view a levy as being a further tax on US companies,” the note reads.
In the January letter, Mr Brophy was also complimentary of tax incentives in Ireland, saying it had made Ireland a more attractive location and contributed to Amazon’s decision to expand its work in Ireland.
The consultant report for Coimisúin na Meán outlined a variety of warnings as the Government considered a levy, including that consumers may have to pay higher subscription rates, potentially see less spent on content produced in Ireland or be offered a lower quality of film and television.
The report outlines that doing nothing would “be unusual” given moves made by the last government such as initiating the Future of Media Commission.
A “wait and see” approach could be justified, it said, if there was a clear likelihood of significant economic harm to Ireland through a reduction in inbound production or an increase in costs. However, it argued “that neither scenario is likely”.
Mr O’Donovan last month said he did not support a levy on streaming services, adding that people were “paying enough” for content and he would not introduce one while Minister.
