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Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

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Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#61
post #55

Earlier quoted context omitted.

>Do we make the word a better place of we cause the destruction of many life-style businesses that provide jobs, a public service, and aren't rapacious and create an environment where only the most aggressive and profitable companies can survive at all, but you get to exact a 3% tax on them? The 3% tax isn't being implemented because it's the best system. It's being done because tech giants have consistently weaseled…

> The 3% tax isn't being implemented because it's the best system. It's being done because tech giants have consistently weaseled their way around the normal way of taxing businesses by fiddling with transfer prices and corrupting governments. No, they admit it's not the best system, that's why they claim it is short-term only. The best system would be an international treaty to harmonize corporate taxes. >Are you al…

>No, they admit it's not the best system, that's why they claim it is short-term only. The best system would be an international treaty to harmonize corporate taxes.

"No" to what? You're just agreeing with what I said. An international treaty would be a much better solution but we're dealing with companies that have already corrupted several European governments, let's not pretend getting something as grandiose as that passed wouldn't be extremely hard.

>I'm arguing you should be taxed for the actual business you do. If I make a dollar because I sold an ad to a local company in the EU because they wanted to reach a customer in the EU, fine. That's a rational tax law. It's not rational to tax for business done elsewhere, sold to people elsewhere, for customers elsewhere, to be counted. Spotify is an EU company, do you think the US should tax them based on global European subscriber revenue?

Other people have already explained that this is not what is on the table. The proposal is to tax at 3% the percentage of the revenues that pertain to EU users, not users elsewhere.

>Really? How would they do that. It's easy to block purchasing physical goods online and have customs block it. How do you block virtual goods? Block payment processing systems? Foreign bank transfers? Bitcoin? Does the EU prosecute a local business for buying ads on Google or Facebook using a foreign bank account?

Yes to all your questions. And the fact that this is escalating is exactly why you should be in favor of proposals to quickly end this exploitation of tax laws by tech giants. Otherwise the internet as we know it is in danger.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#63

Earlier quoted context omitted.

I support whatever the UK voters support. That's how democracy works. As a US citizen, my opinion on Brexit has no bearing, although it’s not hard to understand who voted for it and why they did.

That's a copout when I asked your opinion. You claimed to be a nationalist, I assume you voted for Trump as well. I'm trying to gauge how much I should continue debating or whether it's dogmatic. I could be convinced the EU has a right to do this, in the context of other things, but to me it seems the wrong way to go about closing corporate loopholes and it hurts businesses that aren't Google and Facebook more than i…

[deleted]

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#64

If you are gonna have a form of corporate tax, a tax on revenue is the best way to do it. This will raise prices of goods the least and directly target the largest companies.

well many people unfortunately do not understand that taxes like this get past on to everyone. most only see the tax on their receipt. embedded taxes are the greatest tool of the tax collector

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#66

If you are gonna have a form of corporate tax, a tax on revenue is the best way to do it. This will raise prices of goods the least and directly target the largest companies.

This is 100% wrong. Walmart buys[1] goods for 97 cents and sells them for a dollar. Google produces technology for 50 cents and sells it for a dollar.

A 5% tax on revenue would make Walmart a money losing enterprise while being a minor annoyance for Google.

This is why we tax profit and not revenue. Different industries have radically different cost structures.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#67
post #58

Earlier quoted context omitted.

>So this is money made from EU based users and revenue they make from them. That's a gross oversimplification. Especially with the internet, it's not clear anymore. Let's say that I live in Thailand, have US citizenship, sell products on Amazon in England, ship to France, and then advertise on Google. Who do I pay taxes to and at what rate? Provenance of profit is not easy. You're paying Amazon a cut for shipping/ful…

It's pretty clear. You are selling in the UK so the revenue would be taxed there. Post-brexit the French customer will pay customs duty. The Google ad revenue will be paid by Google based on the market. So the ad run in France generates EU revenue. Doesn't matter if the payor was an American or anyone else. If you are US citizen then you pay world wide income tax. You can deduct foreign taxes paid up to a limit. Bett…

> It's pretty clear. You are selling in the UK so the revenue would be taxed there.

It's not clear at all. Your warehouse is in the states (or where ever) and the goods are never in the UK.

For all cross-border shipments you have to pay customs tax. Just because somebody saw your product on a co.uk website you have to pay the UK for what exactly?

And as you brought up, there are customs taxes as well as income taxes. Why are these artificial delineations good for business?

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#68
I think the tax should be on profit based on where the users are located not on gross revenue.

This looks more like a capitulation in the fight against various tax evading schemes employed by these companies. Isn't possible to just give a broader EU law that criminalises this kind of schemes?(i.e. draining the profit by various means). I'm sure that as soon as a bunch of executives along with their lawyers are put in jail this madness would stop.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#69
post #20

As an answer big techs will likely break these companies into 100 smaller ones to avoid the thresholds? "The levy would cover companies that have annual worldwide total revenue exceeding 750 million euros ($920 million) and total taxable annual revenue from offering digital services in the EU above 50 million euros."

> As an answer big techs will likely break these companies into 100 smaller ones to avoid the thresholds? That sounds like a huge win to me. More competition is better for the market at a whole, and these 100 smaller companies will not be able to stop from competing with each other (or maybe we'll learn they just were better off as separate companies in the first place...)

>> More competition is better for the market at a whole,

Hold on...they will be different companies just on the paper...more like Google1, Google2 and Google3.. instead of one big Google.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#70

I think the tax should be on profit based on where the users are located not on gross revenue. This looks more like a capitulation in the fight against various tax evading schemes employed by these companies. Isn't possible to just give a broader EU law that criminalises this kind of schemes?(i.e. draining the profit by various means). I'm sure that as soon as a bunch of executives along with their lawyers are put in…

Profit is very easy to alter. Gross revenue is not.
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