81–90 of 314 posts
This sort of tax ought to be based on a relative share of megawatts of compute power, and should be progressive in a way that prevents any single entity from controlling more than N% of all computational capacity.
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> 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.
If so, then they really separate companies, not just different on paper. Their ownership of the different companies will eventually diverge from each other and the companies will need to compete with each other to satisfy their owners.
If not, then the taxman will probably be smart enough to send the bill to the parent company instead of the mini-Googles.
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> What right does the EU have to tax revenue (not even earnings) from money made on non-EU citizens? Every right. Their government, their citizens, their laws. > but global revenues? These companies exist globally. They would be vastly smaller and have far less impact if they did not have EU citizens. Network effects matter and ignoring them is choosing to not understand the big picture. > So they'd be asking Twitter…
> Every right. Their government, their citizens, their laws. If a company doesn't have offices in your country, it's not yours. >These companies exist globally Well, maybe the net result is to get out of the EU then, if the costs of 3% of global revenues exceed profits. If you don't think a company that is mostly non-profit (Twitter) shouldn't exist, I feel that's a pretty pathetic position. So you're either a very g…
[1] http://www.dw.com/en/eu-prepares-revenue-based-tax-on-us-tec...
[2] https://www.bloomberg.com/view/articles/2018-03-16/eu-digita...
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>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…
That is exactly what this plan does. It is a tax on revenue generated in the EU from digital advertising, subscription fees and selling of user data. It is not a tax on global revenue. You are arguing against a tax plan that does not exist.
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How so? You still have to pay the gst regardless of if you are Google or if you are in Australia
Isn’t “overseas digital goods and services tax” for overseas companies only ? Serious question here. On the island I live, we have a tax roughly translatable as « Sea tax » which is added even on locally produced good (sounds stupid? It is...)
Many comments seem to of missed this key aspect: "Tax on tech companies to be based on where users are located" So this is money made from EU based users and revenue they make from them.
>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…
You know there's a technical answer to this question. But the answer is pretty predictable : everyone.
Taxes on income in Thailand.
Taxes on income in US.
Taxes on shipping, though pretty much only in the arriving port and several places your shipment might pass (e.g. the Suez Canal)
Taxes on selling in England and France.
VAT France and England.
There are plenty of companies that can help you with this. For an extra fee, of course. And don't think for a second states will help you figure out taxes for free, or even mention/warn you that you need to do it.
Is it financially and logistically realistic for any normal sized company to do anything other than ignore the situation and fraudulently forget about taxes ? No.
What will European states do about that ? Nothing. Well, unless you count utterly destroying a few unlucky token merchants.
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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.
The lower margin businesses will raise prices, and higher margin businesses will be forced to lower prices long term as people will have less money it's not a problem. Taxing profits encourages all kinds of undesirable behavior: buying expensive company cars, conferences in exotic locations, other perks because you get a huge discount (tax deduction) on them. I would argue it's immoral because you're taxing both effi…
In other words, for the 2/3rds or so of the economy that is small and medium businesses this will be a tax on having economic activity at all. That's why it'll never fly (or should I say never be enforced).
And don't worry, as usual, for large businesses there's an easy way out : simply don't transact in money. Then negotiate what the value is of the transaction with the tax department. For instance, buy Disney Club 33 access for all executives and their family in trade for 10% cheaper plumbing for the park. Do huge transactions for suspiciously low monetary value, and they won't get counted in revenue, or only partially. Problem solved.
In case people doubt that such negotiation works, I would like to point out that the most powerful man in Europe, the president of the European commission, Jean Claude Juncker, got where he is by negotiating preferential tax deals with large international corporations. I'd say for years, but the guy is no spring chicken. For decades.
All taxes that are less than 100% enforced (all of them, but these revenue taxes are a particularly bad example. Utterly unrealistic to do this for small businesses) are a tax on honesty. Thing is, you can't have global supply chains without "taxing honesty". And without global supply chains, you won't get an iPad.
Incorporate your business outside the EU. It will protect you from unreasonable taxes and regulations. The internet has no boundaries or residency or citizenship. Especially if you are a software-as-a-service business, ignore everything about the EU and domicile outside it.
Going down the roads that the EU is toward further centralized bureaucratic control over the Internet, they have to build their own version of the Chinese firewall to control EU Internet access eventually. There can be no other possibility if they plan to see this path through to its logical conclusion.
Revenue taxes on businesses that are effectively monopolies in their markets are... not smart. They will raise prices by exactly the amount of the tax and the only ones suffering are their customers who now pay 3% more for everything. I bet it would even be added as line item to every invoice “EU Revenue Tax, 3%” I’m sure everyone will love it!
But how does that work with a company like say Google? What prices are there to raise? It's more like they happened upon an incredible natural resource (the users' eyeballs connected to an unregulated digital network newly built by government funds) and are charging whatever price the market will bear. The tax is just a forced extraction of some of that margin, and I'm not sure how they can compensate for that. If an…