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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

#141

Post by dangsmum »

Oletros wrote: post #132
dangsmum wrote: post #128

Earlier quoted context omitted.

biggest ones that immediately springs to mind is C&A and pfiser in the UK. the UK and US auto industries in general, manufacturing in general. Google left the US. So did Apple. In fact, are there any multinationals left in high tax countries?

What are you talking about? When the heck did Apple and Google left USA? > In fact, are there any multinationals left in high tax countries? I think you're confusing where the headquarters are located with presence in a market

google is just finishing its restructuring to xxvi holdings, apple has had all its cash outside of the us for quite some time.

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

#142

Post by ringtail »

Oletros wrote: post #131
ringtail wrote: post #125

Earlier quoted context omitted.

But what do you mean by "leaving a market" ? MNCs have been doing restructring for decades for reasons ranging from regulations to taxes. If Google do leave EU, all it will do is legal maneuvering. Nothing will change for EU consumers. They can still do Google searches and buy ads. Profit will stay the same.

> But what do you mean by "leaving a market" Pulling off any presence in that market, offices, stores, etc. > If Google do leave EU, all it will do is legal maneuvering. Nothing will change for EU consumers. They can still do Google searches and buy ads. Profit will stay the same. No, because there is all of the burden of a company from outside the EU doing business with EU companies. And not talking about the restri…

Benefit of Sales/Stores are insignificant compared to proposed tax liability. All these can/will be outsourced the moment it becomes reality.

How would EU calculate profit share between US R&D and Ireland R&D ? Even if EU do tax R&D, exodus of talent will be just 2x salary increase away.

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

#143

Post by Oletros »

whb07 wrote: post #129
ionised wrote: post #106

Earlier quoted context omitted.

Google and Facebook have a lot more to lose than the EU in this regard, which is why they will eventually submit to whatever the EU deems reasonable. They are never going to withdraw from the EU. The money they would lose would be immense. The fact that people think Google and Facebook have this kind of power over a developed market of 500 million people is hilarious.

They don't have offices and don't pay taxes for 99% of countries. I don't see you standing up for the sovereign rights of the people from French Guiana or Egypt or Sudan. You see it just so happens that the full breadth of services offered by Facebook and Google are available essentially with a simple internet connection. I'd dare say you could sign up for Gmail and Facebook as a scientist living in Antártica and who…

When taxes are compared to Mafia, there is no point in discussions

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

#144

Post by Faark »

microcolonel wrote: post #92
l5870uoo9y wrote: post #89

Earlier quoted context omitted.

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 aut…

Fundamentally the "problem" lies in the fact that the nominal tax rate they can expect to pay in the United States is the highest among all the developed nations. Ireland is prudent and wise enough to be the better home for their revenues. Globalization means that nations, provinces, and municipalities compete for the patronage of businesses. If you want a global economy, but you also want to be the legal home of Goo…

That's not "competition" between countries. You talking about shitty tax law that doesn't take into account bad acting countries (even within the EU). I don't care about a companies legal home. If they want to make business with consumers in my country those deals should yield taxes to my country. That seems to be the intend of the article's proposal. But the EU also wants to make it easy for companies to offer their products in all member states without making tax dealings to complicated. Having a different set of rules once the company exceeds some revenue doesn't feel like a perfect solution, but way better than them not contributing.

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

#145

Post by anonymousDan »

themihai wrote: post #75
anonymousDan wrote: post #65

Earlier quoted context omitted.

What I want to understand is what happens in the opposite direction, i.e. what does the tax situation look like for e.g Volkswagen cars sold in the US? Do they pay a minimal amount of tax in the US with most of the profits repatriated to Germany? If so it's just a whiney tax grab by the French and Germans who are used to getting their own way in the EU.

Well I don't see any issue repatriating taxed profits. After all they go to a different market to make a profit, right? The issue is when they don't pay their fair share of tax by using various tax evasion schemes more or less "legal".

The reason why they don't pay their fare share of tax is down to US repatriation laws, nothing to do with Ireland: http://www.rollingstone.com/politics/news/the-biggest-tax-sc...

The reason they pay so little tax in the EU is that in line with international law they pay it in the country where most of the innovation that drives those profits occurs, i.e. the US. Or at least they would if the US wasn't basically using its weak repatriation laws as a way of giving its companies a competitive edge against the EU. The moves by France et al can be viewed as a way to address this, but I imagine it would require major changes to international accounting rules and I would be surprised if there wasn't retaliation from the US. I guess my point is you can't really blame Ireland for not doing this unilaterally. Furthermore why should Ireland increase its corporation tax rate when it is explicitly outside the competence of the EU?

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

#146

Post by germanier »

ptaipale wrote: post #139
germanier wrote: post #98

Earlier quoted context omitted.

Google's customers are almost all VAT collecting companies. That means that not Google but their customer is responsible for paying the tax. It can be deducted from their tax burden they have because they sell to end-consumers. The point of this discussion is not the tax on the sale itself (which is indeed already there) but on the profit at Google that results of this sale.

Google has plenty of non-VAT-collecting consumers as customers. For instance, anyone who purchases apps or makes in-app purchases.

Looking at their income statement (although not as detailed as one would like) reveals that this amount is minuscule compared to their ad revenue.

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

#147

Post by alkonaut »

ringtail wrote: post #135
alkonaut wrote: post #114

Earlier quoted context omitted.

Perhaps I was unclear: The suggestion is not to tax the revenue, but to tax based on revenue - that is: the tax would still be on $5 profit but where that tax is extracted is decided by where the company was doing business, rather than where it is incorporated.

Hmm thats effectively consumption tax of very significant rate (eg 33%).

How is that? The same corporation could be paying exactly the same corporate tax rate on exactly the same base, under such a scheme.

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

#148

Post by zerebubuth »

elgenie wrote: post #113
zerebubuth wrote: post #104

Earlier quoted context omitted.

I thought that a necessary part of the "Double Irish with a Dutch Sandwich" was that a company in a tax haven can license IP to its subsidiary at an arbitrary price. Therefore, that company can offset any profit its own subsidiary might make. To do this requires two things: 1. That the license arrangement with the subsidiary is unique to that subsidiary. 2. That the license fee can be set to any value at any time. Fo…

The Double Irish + Dutch is merely the most extreme example of the transfer pricing morass (and will go away in a few years). There are a bunch of other funky methods described in the wikipedia article I posted on the topic; defining and proving in court that a particular method of determining "market rate" was unreasonably chosen and incorrect enough to be worth the trouble is quite involved and, in normative terms,…

I wasn't suggesting that anyone define or prove a "market rate" for intangibles. I agree that would be a waste of time. The reason I mentioned it was as a contrast to IP licenses, for which no market exists.

Profits are subject to tax, as are people's incomes, consumer sales, assets such as cars, TVs and homes, and goods which cross customs borders. I was suggesting that another tax (or duty) be created to discourage the offsetting of profits using IP licenses.

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

#149

Post by vixen99 »

ionised wrote: post #137
whb07 wrote: post #129

Earlier quoted context omitted.

They don't have offices and don't pay taxes for 99% of countries. I don't see you standing up for the sovereign rights of the people from French Guiana or Egypt or Sudan. You see it just so happens that the full breadth of services offered by Facebook and Google are available essentially with a simple internet connection. I'd dare say you could sign up for Gmail and Facebook as a scientist living in Antártica and who…

I'm not even sure what point you are trying to make with this rant other than what sounds like tax is theft . Would you rather multinationals were not taxed at all? If something is tricky to get right is it not worth doing at all? If that's what you believe you're not going to find many on your side.

I think we can see how you define 'rant'.

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

#150

Post by ringtail »

alkonaut wrote: post #147
ringtail wrote: post #135

Earlier quoted context omitted.

Hmm thats effectively consumption tax of very significant rate (eg 33%).

How is that? The same corporation could be paying exactly the same corporate tax rate on exactly the same base, under such a scheme.

In my understanding what you are saying is, a country will tax profit on revenue generating from its own territory by its own tax rate.

For the sake of simplicity, assume 100% profit margin. Let R and R' be revenue generating without and with such tax law. Let T be tax rate.

So a company was hoping R into its bank account. But with the new taxes it would be (R - RT). Naturally the company would just increase the revenue to R' (by increasing prices) where it would give R'T to Govt and keep (R' - R'T).

R'(1 - T) = R

R' = R/(1-T)

Actually I underestimated new tax, for T=33% it would be 49.25%.

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