France plans 'Google tax' on Internet searches • Hacker News Board

Re: France plans 'Google tax' on Internet searches

#31

Post by fleitz » Thu, Jan 07, 2010, 11:45 PM UTC

joubert wrote: post #26

aarongough wrote: post #23

Earlier quoted context omitted.

Methinks some sarcasm was embedded in the tone of the original comment here...

But I think his sarcasm is an extension of the snide tone in the article, while missing the major point (which the journalist actually made in the introduction before diving into the culture-maintainance mumbo jumbo) - i.e. one set of companies are paying taxes on their revenue, while another industry isn't.

Both companies are paying taxes on their income, it's just that Google, MS and Yahoo choose to derive their revenue in a country that is more friendly to their operations (Ireland). France wants to tax the action (the click) instead of income (the advertising which is purchased in Ireland).

IMHO France is putting up the digital piracy bogey man to satiate the content industry while also allowing it to pass a tax onto it's populace. Once people become used to the tax they will increase it and divert the profits elsewhere. Of course I can't prove because it involves future actions that may or may not take place and the intent may not currently be there.

The irony of it all is that the telephone example is an example of my point that gov'ts keep taxes around long after their initial reasons for existence have passed. Income tax being another great example. I think the debts of WW1 have long since been paid.

Re: France plans 'Google tax' on Internet searches

#32

Post by joubert » Thu, Jan 07, 2010, 11:49 PM UTC

wendroid wrote: post #28

joubert wrote: post #14

Aren't they just simply proposing to tax online advertising revenue? What's the big deal?

An additional and arbitrary tax. Google was given a tax break to locate in Eire and pays tax there, not France, so France want to tax them too.. Presumably it is expenditure of French companies being paid to Google Eire. But presumably the goods and services thus provided get taxed if they cross the border into France or if they originate in France then the French companies pay their usual tax on profits. The justifi…

What do you think will the IRS do if Google relocates its world HQ to Ireland, shifting its tax burden there and avoiding tax in the US?

Re: France plans 'Google tax' on Internet searches

#33

Post by joubert » Thu, Jan 07, 2010, 11:57 PM UTC

fleitz wrote: post #31

joubert wrote: post #26

Earlier quoted context omitted.

But I think his sarcasm is an extension of the snide tone in the article, while missing the major point (which the journalist actually made in the introduction before diving into the culture-maintainance mumbo jumbo) - i.e. one set of companies are paying taxes on their revenue, while another industry isn't.

Both companies are paying taxes on their income, it's just that Google, MS and Yahoo choose to derive their revenue in a country that is more friendly to their operations (Ireland). France wants to tax the action (the click) instead of income (the advertising which is purchased in Ireland). IMHO France is putting up the digital piracy bogey man to satiate the content industry while also allowing it to pass a tax onto…

But that's my point - aren't they really deriving their advertising income as, when, and where a user clicks on an ad?

Google Ads are different from regular advertising since the revenue accrues at the time the user clicks and located where that transaction occurs, which is on the user's desktop (i.e. place of delivery).

Re: France plans 'Google tax' on Internet searches

#34

Post by cwan » Fri, Jan 08, 2010, 12:02 AM UTC

joubert wrote: post #27

karzeem wrote: post #2

The core problem with this scheme is one that's endemic to this sort of legislation. It's a basic assumption that economic interactions are all ultimately zero-sum, which is simply untrue. The idea that Google (or anyone else) must necessarily derive its success from somehow, somewhere screwing people denies the fact that the healthiest economies are packed with non-zero-sum interactions.

Taxation is also a tool to shape behavior.

Not sure how this relates to what karzeem has said. You're right, taxation can shape behaviour. So what do you suppose it's saying here? Let's tax and discourage a productive part of society - or at least a part that helps people get things done faster to subsidize an industry (that's already being protected and promoted by government) that people are not interested in enough to actually support with their own money?

Let's also not forget Quaero that the French tried to create as a counterbalance to supposedly American centric search for a total estimated amount of 293M Euros over 5 years! If the French government was that concerned about certain favored industries, why not just put their money there?

Re: France plans 'Google tax' on Internet searches

#35

Post by aarongough » Fri, Jan 08, 2010, 12:03 AM UTC

joubert wrote: post #20

aarongough wrote: post #19

Earlier quoted context omitted.

The big deal is that they're planning on using the money generated to support creative industries that are harmed by digital innovation . ie, the music industry.

But the music industry gets taxed on their revenue, no? If so, shouldn't the search engines be taxed on their advertising revenues?

As per the comment above: they are already taxed on their advertising revenue.

Re: France plans 'Google tax' on Internet searches

#36

Post by aarongough » Fri, Jan 08, 2010, 12:04 AM UTC

joubert wrote: post #25

aarongough wrote: post #16

Earlier quoted context omitted.

But the money is still being used to prop up a market that cannot support itself. If it was a vital service (like maybe a utility service) then I could understand. But we are talking about the music industry !

But why should search engines be able to escape paying taxes on their advertising revenues, while the music industry must pay taxes on their revenues?

You keep saying the same thing again and again. It's still not correct.

The companies that own the search engines are already paying tax on their advertising revenue. See other person's comment above.

Re: France plans 'Google tax' on Internet searches

#37

Post by joubert » Fri, Jan 08, 2010, 12:12 AM UTC

cwan wrote: post #34

joubert wrote: post #27

Earlier quoted context omitted.

Taxation is also a tool to shape behavior.

Not sure how this relates to what karzeem has said. You're right, taxation can shape behaviour. So what do you suppose it's saying here? Let's tax and discourage a productive part of society - or at least a part that helps people get things done faster to subsidize an industry (that's already being protected and promoted by government) that people are not interested in enough to actually support with their own money?…

I simply said that because he said the motivation from this proposed tax stems from the misbelief of the zero sum game in wealth creation.

However, from the article it seems it is more a way to to stimulate certain behavior (i.e. cultural developments).

Re: France plans 'Google tax' on Internet searches

#38

Post by joubert » Fri, Jan 08, 2010, 12:25 AM UTC

aarongough wrote: post #36

joubert wrote: post #25

Earlier quoted context omitted.

But why should search engines be able to escape paying taxes on their advertising revenues, while the music industry must pay taxes on their revenues?

You keep saying the same thing again and again. It's still not correct. The companies that own the search engines are already paying tax on their advertising revenue. See other person's comment above.

But they're not paying tax in France, where, one can argue the advertising revenue originates as and when the user clicks on the ad since it is only then that the good is considered delivered (very different from traditional advertising).

Re: France plans 'Google tax' on Internet searches

#39

Post by joubert » Fri, Jan 08, 2010, 12:27 AM UTC

aarongough wrote: post #35

joubert wrote: post #20

Earlier quoted context omitted.

But the music industry gets taxed on their revenue, no? If so, shouldn't the search engines be taxed on their advertising revenues?

As per the comment above: they are already taxed on their advertising revenue.

But they don't get taxed in the jurisdiction where the revenue originates (as and when the user clicks on the ad).

Re: France plans 'Google tax' on Internet searches

#40

Post by aarongough » Fri, Jan 08, 2010, 12:39 AM UTC

joubert wrote: post #39

aarongough wrote: post #35

Earlier quoted context omitted.

As per the comment above: they are already taxed on their advertising revenue.

But they don't get taxed in the jurisdiction where the revenue originates (as and when the user clicks on the ad).

Exactly the same way that if Amazon sells a product to someone in Africa, from their USA based website, Amazon do not have to pay taxes on that revenue in Africa.