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EU lost up to €5.4B in tax revenues from Google, Facebook: report

reuters.com

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Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#81

Post by jakubp »

elgenie wrote: post #67

Taxing multinational corps is pretty difficult. Let's say a parent company UsTech, which makes money from ads on a ubiquitous digital platform, has an Irish subsidiary UsTechDublin,LLC and a German subsidiary UsTechBerlin,GMBH. UsTechBerlin hosts a bunch of very well paid engineers who work on app performance and backend infrastructure efficiency; UsTechDublin hosts a bunch of low paid customer service reps that prov…

Majority of revenue is coming from ads.

If Google were taxed for each ad income based on the country of where the ad buyer is located, they couldn't manipulate it as easily. Also clients wouldn't be inclined to set up shop in tax havens, because why would they? It's not their problem.

I'm not sure this is a good solution, it might also be possible to game it, but at least that would make sense from the perspective of assigning benefit to a territory: if a myriad small businesses in, say, France, need Google ads, why not tax Google in France for that amount? It is in a sense Google's access to French market that we are taxing.

Could that work?

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#82

Post by Supernaut »

peteretep wrote: post #74
Supernaut wrote: post #63

Earlier quoted context omitted.

Can we see some evidence for that claim? According to my research, Ireland is a net contributor to the EU budget. In 2014, the last year for which complete data is available, the country paid €168m more to the EU than it received in grants and payments.

Your comment is either unlucky or massively disingenuous in choosing 2014, as: "Ireland has [in 2014] become a small net contributor to the EU Budget for the first time since it joined the bloc in 1973" http://www.independent.ie/business/irish/ireland-contributes...

I'm not sure what the point you're making is. The country's corporate tax rate was only reduced to 12.5% in the late '90s. Before that, it was comparable to other that of other EU nations. The reduction in the rate, along with other factors, helped the economy to grow over the next 15 years, to the point where the country became a net contributor. It would have happened well before 2014 had the Irish economy not been reeling from the effects of the 2008 crash.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#83

Post by SunShiranui »

whb07 wrote: post #58

I wonder what would happen if G/F just upped and "left" the EU? Ensuring to close every physical location as they did so. I wonder how much of a bind the politicians would be trying to remain in power as they would be in the position of trying to add Google and Facebook to the ban list or just continuing like normal except with less tax revenue. Does anyone here really believe that any EU bureaucrat would ban Faceboo…

And leave one of the biggest markets in the world? Why would they?

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#84

Post by endless1234 »

anonymousDan wrote: post #62
gaius wrote: post #55

Earlier quoted context omitted.

Ireland is only able to charge such low corporation tax due to the generous subsidies it receives from the EU too.

Eh? Think you need to get your facts straight: https://amp.independent.ie/business/irish/ireland-contribute...

Hm? "For the first time since it joined the bloc in 1973" "Since 1973, Ireland has received over €50bn."

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#85

Post by ptaipale »

peteretep wrote: post #74
Supernaut wrote: post #63

Earlier quoted context omitted.

Can we see some evidence for that claim? According to my research, Ireland is a net contributor to the EU budget. In 2014, the last year for which complete data is available, the country paid €168m more to the EU than it received in grants and payments.

Your comment is either unlucky or massively disingenuous in choosing 2014, as: "Ireland has [in 2014] become a small net contributor to the EU Budget for the first time since it joined the bloc in 1973" http://www.independent.ie/business/irish/ireland-contributes...

I think it is not massively disingenuous to use the newest data available. I did not find much better figures for 2015 or 2016. Another source suggests that Ireland has been net contributor since 2013 and continued so in 2015. http://www.thejournal.ie/ireland-financial-gain-from-eu-fran...

It is true that Ireland has been a huge net receiver from EU for a long time. Now that it becomes a net contributor, I suppose we could call that "development". And perhaps this shows that Irish tax policies do increase its economic activities.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#86

Post by lin_lin »

sddfd wrote: post #36
DannyBee wrote: post #31

"This resulted in estimated revenue losses for EU states, other than Ireland, of between 51 and 54 billion euros between 2013 and 2015, the report concluded." So if i understand this right, this is basically: the EU didn't really lose anything, since ireland is in the EU, but the other states would have gotten more in total if they weren't allowed to do this? My other understanding is that the tax laws of all the EU…

Not really. Ireland has some deals going with several digital multinationals. The guardian writes: "Google pays €47m in tax in Ireland on €22bn sales revenue" https://www.theguardian.com/business/2016/nov/04/google-pays...

Nice selective headlining from the Guardian. Usually txes are paid on profits. Wouldn't drive the clicks though.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#87

Post by ptaipale »

jakubp wrote: post #81
elgenie wrote: post #67

Taxing multinational corps is pretty difficult. Let's say a parent company UsTech, which makes money from ads on a ubiquitous digital platform, has an Irish subsidiary UsTechDublin,LLC and a German subsidiary UsTechBerlin,GMBH. UsTechBerlin hosts a bunch of very well paid engineers who work on app performance and backend infrastructure efficiency; UsTechDublin hosts a bunch of low paid customer service reps that prov…

Majority of revenue is coming from ads. If Google were taxed for each ad income based on the country of where the ad buyer is located, they couldn't manipulate it as easily. Also clients wouldn't be inclined to set up shop in tax havens, because why would they? It's not their problem. I'm not sure this is a good solution, it might also be possible to game it, but at least that would make sense from the perspective of…

What? In EU, Google is taxed for each ad income, as well as app sales, based on the country of where the sale takes place. It's called Value Added Tax. Countries can set the rate. Mostly the rates are in the order of 20 %.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#88

Post by aembleton »

elgenie wrote: post #67

Taxing multinational corps is pretty difficult. Let's say a parent company UsTech, which makes money from ads on a ubiquitous digital platform, has an Irish subsidiary UsTechDublin,LLC and a German subsidiary UsTechBerlin,GMBH. UsTechBerlin hosts a bunch of very well paid engineers who work on app performance and backend infrastructure efficiency; UsTechDublin hosts a bunch of low paid customer service reps that prov…

Require UsTech to run their sales to their Ireland and German customers through their Ireland and German subsidiaries. Then tax them based upon the result of their (sales to Irish customers - Irish costs) and in Germany, the equavelent (sales to German customers - German costs).

It's quite possible in those two places, they would pay no tax because their costs are higher, but this is also an incentive to keep employing people in said countries.

To help enforce this, other companies in Ireland and Germany would only be able to reduce their taxes by purchasing from Irish and German registered companies (tax based on Irish costs - Irish sales) which would mean that they would be incentivised to buy from these rather than UsTech global corp.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#89

Post by l5870uoo9y »

staticelf wrote: post #56

I really hope a new tax bill comes through, I am tired of US companies (and others) that can simply avoid paying tax while small shops pay a lot of taxes in the EU. They use our well developed infrastructure for their own benefit and does not pay anything back. I hope they get a fat bill.

The underlying problem is that companies take advantage of "globalization". Companies can legally move not only their production abroad but also the profit. So companies naturally — with the blessing of American business inteligensia — avoid taxes. I think national control of the economy is eminent and is the only way forward if you want to realize and spread some of the tremendous opportunities and benefits that automatization and digitalization brings us.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#90

Post by microcolonel »

staticelf wrote: post #56

I really hope a new tax bill comes through, I am tired of US companies (and others) that can simply avoid paying tax while small shops pay a lot of taxes in the EU. They use our well developed infrastructure for their own benefit and does not pay anything back. I hope they get a fat bill.

They pay for your infrastructure already (aside from last-mile stuff, which you pay for [partially] whether or not it's a local company).

If you tax it, the prices just go up, nothing really changes.

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