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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

#191

Post by alkonaut »

ringtail wrote: post #189
alkonaut wrote: post #188

Earlier quoted context omitted.

Ok now I'm not sure what you are arguing: are you saying this is a bad idea because it is too hard to implement? Or a bad idea because of how it would increase corporate taxes, which would land on consumers? I can't see how it would be a net negative for those countries that would get a nonzero corporate tax from megacorps that today contribute around zero. Even with price increases, the net effect seems like it woul…

Its very high consumption tax. Effective, implementable but harder to get public support for. Cost of living (CoL) would rise. High corporate tax means high CoL. Every percentage increase will make it worse than last percentage. Wages would have to rise significantly. This will discourage business from moving to high-tax countries. People will likely move to low-tax countries. I can't see how it would be a net negati…

> Its very high consumption tax

You keep saying that, and I keep not understanding it. I realize higher prices (Companies shifting the tax to consumers) is a burden for consumers. But at the same time, if government tax revenue increases, then taxes could be cut (of all kinds: income, VAT, and corporate).

E.g. IKEA in Sweden ships 3% of their revenue as "royalties" to a dutch company, thereby reducing their swedish tax amount by over €100M/yr. If that money and money from similar companies was actually paid in Sweden, then Sweden could have a lower tax rate (e.g. 20%) and still have the same revenue. Or the VAT could be slightly lowered from 25%, to offset the fact that for a few products from multinational corporations, the products would be slightly more expensive.

Also: the argument that higher corporate tax rate = Higher CoL = bad, could be extended too. But how far? If the rest of the EU adopted Irelands low corporate tax rate, what would happen then?

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

#192

Post by Xixi »

ringtail wrote: post #176
alkonaut wrote: post #167

Earlier quoted context omitted.

The US->Ireland->EU thing is exactly what's going on now, and exactly what proposals like this are trying to address. This kind of system will only work within a group of nations that agree that this is a good idea, such as the EU. Ireland and the Netherlands probably don't agree - but can hopefully be forced. Obviously no countries in the EU have territorial taxation.

The US->Ireland->EU thing is exactly what's going on now, and exactly what proposals like this are trying to address. Thats why gave this example to show that it does not work as profit remains the same. Lets assume there is no US Co. Ireland Co is parent company and its only doing business in EU. Then either Ireland [1] allows low tax rates to attract business in which case profit is low and thus UK/France share is…

In your example if Ireland Co makes 30% of its sales in France, then it would have to pay taxes on 30% of its profit to France (at French rate). That limits the reason to go to Ireland in the first place, which is why Ireland is largely against it. In fact it would encourage corporations to move their costs to countries with large customer base and high taxation rates to reduce the profits there, so it would favor the like of France, Germany or Italy.

The "trick", if I understand, is to only care where the final service/product is actually delivered. So in your example the idea would be to ignore France SAS, or rather I imagine to assume Ireland Co and France SAS are one and the same, and tax them "together".

At first glance it sounds very hard to setup (and it certainly is), but that's what is being attempted here. On the other hand it's not particularly complicated to know whom Google is selling ads to, and where iPhones are sold, so there must exist a solution to this problem...

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

#193

Post by microcolonel »

l5870uoo9y wrote: post #169
microcolonel wrote: post #92

Earlier quoted context omitted.

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…

You can't complete with a country like Singapore, which literally asked foreign hedge fund managers to help write their tax laws. You can setup a company in Singapore for 1000$ per year and you pay no tax on all income outside Singapore.

Why can't you compete with a country like Singapore? Aside from very strict regulations on social taboos (being visibly naked through a window, chewing gum, drugs [a superset of each major religious group's preferences]), Singapore functions quite well. They have less than 2% unemployment, they are highly developed, GDP per capita is only slightly lower than the United States, income inequality is fairly high, but absolute poverty is exceedingly rare and mobility is good.

Of course, there are cultural differences which would probably get in the way of the U.S. reaching goals like this with such efficiency, but surely Singapore proves that it's possible.

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

#194

Post by microcolonel »

heavenlyblue wrote: post #119
microcolonel wrote: post #92

Earlier quoted context omitted.

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…

Fundamently the problem lies in the fact that civilised countries forget how much more social security a corporation gets from operating a business in there: no hostile takeovers, police coming in time, medical insurance for their employees, functional legal systems. Take all of this away and a corporation is going to be killed instantly (you're a victim of fraud on a massive scale? you haven't payed your taxes this…

> Fundamently the problem lies in the fact that civilised countries forget how much more social security a corporation gets from operating a business in there: no hostile takeovers, police coming in time, medical insurance for their employees, functional legal systems.

Wouldn't this all impact ROI?

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

#195

Post by microcolonel »

Faark wrote: post #144
microcolonel wrote: post #92

Earlier quoted context omitted.

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…

> bad acting countries

In what way is Ireland a bad actor? Locally operated businesses get a good deal too. What about Poland? Those shipyards aren't moving to your tax hell any time soon, but that doesn't make Poland a "bad actor".

It may surprise you, but no country has the obligation to exploit and screw over businesses as much as yours would like to.

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

#196

Post by lucideer »

peoplewindow wrote: post #181
lucideer wrote: post #50

Earlier quoted context omitted.

> My other understanding is that the tax laws of all the EU countries are not controlled by the EU, but by the individual countries? This is partially but not 100% correct. Tax laws are controlled or "administered" by individual countries but overseen by EU directives. This means that while individual countries apply the law, their application must comply with EU guidelines. The Irish government has been found guilty…

Can you cite the parts of the treaties that say that? The reality is that in the treaties the EU very explicitly does not have control over tax . In fact, this was a key issue in the last Irish referendum on the EU treaty changes. The Irish rejected the treaty until they received explicit assurances from the EU that they'd never lose any control over local tax and the EU wouldn't attempt to undermine their local corp…

The EU doesn't have any direct control over tax, but the treaties govern how law is applied by member states, including tax law. They do this in a multitude of ways, but in the specific case mentioned above you're looking for Article 107 of this treaty[0] which prohibits member states giving corporations individual tax deals that are not afforded to others operating in the same market. The follow-on report on Google, Facebook seems to indicate that they'ree looking at similar individual deals made there.

> But as it turns out, the EU's assurances on such things were useless and the Irish people were misled.

Leaving aside the absolute spurious nature of that BBC article (there is nothing to support the supposition that the No vote (nor the swing to Yes) had anything to do with taxation or - most ridiculous of all - abortion), even in an imaginary world where those issues were of import, I can't see where anyone was misled. Can you cite cases where the guarantees have been broken?

[0] https://www.ecb.europa.eu/ecb/legal/pdf/c_32620121026en.pdf

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

#197

Post by Oletros »

ringtail wrote: post #142
Oletros wrote: post #131

Earlier quoted context omitted.

> 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.

> Benefit of Sales/Stores are insignificant compared to proposed tax liability.

You're joking, isn't?

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

#198

Post by Oletros »

dangsmum wrote: post #141
Oletros wrote: post #132

Earlier quoted context omitted.

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.

I repeat, you're confusing headquarters with presence.

If yu're seriously saying that Apple or Goole have left USA and the EU you're really don't know what we're talking about

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

#199

Post by Oletros »

whb07 wrote: post #170
ionised wrote: post #137

Earlier quoted context omitted.

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.

First, let's establish some basic points. Governments don't have money, people do. Companies don't have money, people do. In the case of government, it taxes the money to get funds to spend in its activities. In the case of companies, the investors and employees are the ones who own that money. If you hold those basic tenets true, then why deal with taxing moneyless companies? If you're to look at the breakdown of st…

> But why should the working grandmother in Idaho have to pay EU taxes as she owns a 0.000001% ownership or whatever in Google? In what rational world is that "fair"?

She doesn't pay any taxes in the EU.

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

#200

Post by Oletros »

whb07 wrote: post #165
Oletros wrote: post #143

Earlier quoted context omitted.

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

It's the actual definition of government, it does everything with the threat of violence. In the grand scheme of things, the social contract between members of society, some rights are given up to the state to be the intermediary. They enforce rules with threat of encarceration and are able to deal with problems via force (cops and military). So yes, taxes are collected just like the Mafiosi collect their debts.

> So yes, taxes are collected just like the Mafiosi collect their debts.

as I said, when someone can make such claims like this, no discussion is possible.

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