Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan • Hacker News Board

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

#131

Post by Mononokay » Sun, Mar 18, 2018, 8:42 AM UTC

cryptoz wrote: post #44

cromwellian wrote: post #37

Earlier quoted context omitted.

People are up in arms about China as well, and IMHO, the US and EU should take them to the WTO over unfair trade practices. But stop focusing on Google for a moment, and consider poor Twitter. Can they really afford this tax? If you're already losing money, or breaking even, why should you have to pay taxes on $$$/user earned in the US or Japan?

> consider poor Twitter. Can they really afford this tax? If they can't afford a simple tax on their business in a region then they shouldn't be doing business there or at all. What do you mean, "poor Twitter"? It's not a person. It doesn't have emotions or feelings. We don't need to treat it like a poor little snowflake and make sure it never melts. If Twitter can't handle being taxed then Twitter should die. That's…

It can be argued that Twitter is less a for-profit corporation and more a public-benefit corporation at this point.

Considering most EU officials communicate with denizens on it, and that it arguably costs them a far greater amount than what they'll be taxed for, it's hard to argue that they aren't already really paying tax in a roundabout way, donating computational resources to the EU to maintain stability of the Union at a cost to themselves.

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

#132

Post by nothrabannosir » Sun, Mar 18, 2018, 8:46 AM UTC

sjg007 wrote: post #58

jimmywanger wrote: post #52

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…

> Post-brexit the French customer will pay customs duty.

Out of interest: Would they? This is an EU law, so that would assume UK kept it after brexit , either specifically or through some wholesale “fork all the trade laws”. But it would also imply a lack of inter-European treaties, i.e. fork the laws but don’t keep the treaties.

I haven’t kept fully up to date with the latest brexit developments , are we far enough along in the negotiations to know this stuff yet? Last I heard it was still a complete s*show :/

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

#133

Post by notahacker » Sun, Mar 18, 2018, 8:50 AM UTC

cromwellian wrote: post #47

MrLeap wrote: post #23

Earlier quoted context omitted.

I like your fire. I think we would have fun debating things for days. You've boxed the parent into three positions. They're kind of orthogonal so it's hard to approach directly, but consider a hypothetical 4th position. What if the parent hypothetically thinks that twitter is acceptable collateral damage if it means fixing some other abuse, does that make him greedy? What if he gains nothing from it? I think I've jus…

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? Let me provide an alternative hypothetical scenario: Major tech companies withdraw their businesses out of EU jurisdictions. The…

Companies can close down offices and move servers as much as they like. They won't though, because the reason they open offices in very expensive European city centres is they get more than 3% additional revenue from doing so.

Similarly, the reason they pretend sales are conducted in a different country from the client, account manager and geotargeting of the ad is nothing to do with the right to publish things accessible to the whole world and everything to do with paying less tax. Content gatekeepers selling targeted European eyeballs to advertisers is at best orthogonal to the utopian view of the internet as a means to share knowledge irrespective of where and by whom it's consumed.

I've heard some pretty tortuous rationalizations for tax avoidance in the past, but inventing an imaginary Great Firewall of Europe so you can be furious at the EU asking your employer to pay a sales tax on ads is a whole new level. :-)

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

#134

Post by [deleted] » Sun, Mar 18, 2018, 9:01 AM UTC

Buge wrote: post #124

Let's say a company has their headquarters in country A. A user from country B uploads a video filmed in country C. Someone from country D buys an ad to be placed on that video, and the purchase is processed in country E, while the sales agent is based in country F. A different user in country G watches the video and clicks on the ad. The video was served from a server in country H, and the ad from a server in countr…

[deleted]

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

#135

Post by drpgq » Sun, Mar 18, 2018, 9:04 AM UTC

adventured wrote: post #89

mankash666 wrote: post #85

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.

The EU will block your service's access into the EU market. That's their only possible next recourse if you simply ignore them and stay out of their jurisdiction physically (in a scenario where you continue to sell to EU customers, but refuse to abide by their policies such as this tax). They'll also go after the payments side, they'll try to shut off your ability to get the payments from EU customers. Going down the…

They could make it so advertising on FB or Google isn't considered a valid business expense. Canada does something similar for advertising for magazines.

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

#136

Post by sumedh » Sun, Mar 18, 2018, 9:05 AM UTC

pimmen wrote: post #128

Buge wrote: post #124

Let's say a company has their headquarters in country A. A user from country B uploads a video filmed in country C. Someone from country D buys an ad to be placed on that video, and the purchase is processed in country E, while the sales agent is based in country F. A different user in country G watches the video and clicks on the ad. The video was served from a server in country H, and the ad from a server in countr…

Country D, I think. That's where the sale was made.

> Country D, I think. That's where the sale was made

How can the company determine if a user is from Country D, ip address or what the user enters in the address box?

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

#137

Post by alkonaut » Sun, Mar 18, 2018, 9:16 AM UTC

runeks wrote: post #118

lovich wrote: post #101

Why are a large amount of people treaing access to other nations markets as a human right? I can see the argument behind saying you should have access to your local market be realtively free, you have to live somewhere, and you and your local societies interests are relatively aligned. However,when it comes to foreign markets many people here seems to want the best of both worlds. It's a paraphrase but it seems like…

> Why are a large amount of people treaing access to other nations markets as a human right? Why would you want to restrict (economic) interaction between two parties just because they’re far away from each other? I’m sure some of the local companies in my area would love to prevent me from buying goods elsewhere, but why would I want to buy goods elsewhere unless they are either cheaper and/or of better quality? In…

> Why would you want to restrict (economic) interaction between two parties just because they’re far away from each other

I think the fundamental difference in view is on the one hand seeing two parties as individuals that should be free to have this interaction.

On the other hand as two individuals in a society, whose ability to even consider having the interaction comes from society providing the means (infrastructure, education, legal frameworks, ...) and that the idea of individuals doing interactions on their own isn’t even a reasonable concept.

Reality lies somewhere in between but I subscribe more to the latter.

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

#138

Post by ben_w » Sun, Mar 18, 2018, 9:17 AM UTC

sumedh wrote: post #136

pimmen wrote: post #128

Earlier quoted context omitted.

Country D, I think. That's where the sale was made.

> Country D, I think. That's where the sale was made How can the company determine if a user is from Country D, ip address or what the user enters in the address box?

Billing address, given a sale is involved. Bank accounts tend to be attached to an address, and they can be traced if any silly loopholes get exploited.

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

#139

Post by reacharavindh » Sun, Mar 18, 2018, 9:18 AM UTC

sumedh wrote: post #136

pimmen wrote: post #128

Earlier quoted context omitted.

Country D, I think. That's where the sale was made.

> Country D, I think. That's where the sale was made How can the company determine if a user is from Country D, ip address or what the user enters in the address box?

Isn't that an available information from the user's credit card/bank account?

Now, of course there will be people who are residents of a different country or have cards from multiple countries, but I'd expect that to be a negligible fraction.

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

#140

Post by vidarh » Sun, Mar 18, 2018, 9:19 AM UTC

cromwellian wrote: post #42

toomuchtodo wrote: post #24

Earlier quoted context omitted.

> If a company doesn't have offices in your country, it's not yours. Google has offices in almost every EU country. https://careers.google.com/locations/ Aarhus, Amsterdam, Athens, Berlin, Bratislava, Brussels, Budapest, Copenhagen, Dublin (EU HQ), Eemshaven, Frankfurt, Hamburg, Hamina, Helsinki, Lisbon, London, Lubeck, Madrid, Milan, Moscow, Munich, Oslo, Paris. Prague, Rome, Saint-Ghislain, Stockholm, Vienna, Warsa…

Those are mostly sales offices, not corporate HQ. Do sales offices need to physically exist locally for internet service sales? Something to ponder.

Sales offices are there because they do substantial sales in the region. What exactly do you think the EU will do if they remove their physical footprint and refuse to pay tax?

The answer is simple: They'll get court-approval to confiscate funds being transferred to these companies from European customers.

So the real option on the table is to stop taking money from anyone in Europe, and the European market is simply too big for that to be a realistic option.