Can't tech giants just split their EU operations in 2, and thus split the revenue, and thus dodge the tax
The parent company will have the revenue of both. If there is no parent company they have effectively spun off a separate business.
Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
211–220 of 314 posts
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#212Earlier quoted context omitted.
You comment doesn't make sense to me. Face it: some form of taxation was going to appear no matter what. It's inevitable. You don't just roll into a country, make billions of dollars, and expect to pay no tax in perpetuity. As tax proposals go, this one is pretty reasonable. This isn't a punitive measure because it sets no one apart for any past behavior. It also isn't a "shield from competition" because all companie…
The companies and their employees pay taxes, though. On electricity, on data, on personal income, on gasoline, on property, etc. Whether an entity is paying its fair share is a legitimate question, but it's strange to me to blame companies for following the law as written.
It's not blame, it's complete lack of sympathy for tech corps' complaints about the tax.
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#213Earlier quoted context omitted.
Google, Amazon, Microsoft etc. are still there. The US can still produce steel and computer chips. Other countries subsidising domestic production of software, steel and computer chips did not lead to the US being unable to do so. And amazon is pretty big in China, taobao and jingdong are just bigger and better.
Yes, they are still there, but the protectionism is what allowed the local companies (Baidu, Tencent, Alibaba etc) to compete initially and be better in the end. Whereas in EU, local competition has been crushed and it is now stuck with the monopolies.
Baidu is still not better than Google, even in Chinese, for what it’s worth.
Infant industry protection may make sense in some cases but it’s more commonly used as a smokescreen for corruption. It was used as a justification for high tariffs and low quality domestically produced goods all over the world throughout the 50s to at least the 80s.
If the EU doesn’t have much in the way of domestic IT companies so what? They’re still rich. The fact that others are getting rich in other, different ways does not make them poorer.
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#214Personally, I like this proposal. I like that it's simple: any overly complex system will almost inevitably result in distortion and loopholes. A few points of my favorite points: * It's done on revenues and not profits. This avoids the impossible question of where profits are realized: if you make money in one country but displace that earning by costs somewhere else, it's practically impossible to determine where t…
> Personally, I like this proposal It is meant to be a popular proposal that will win lots of likes for the EU, but it's stupid on the face of it and it will end up comically abused. E.g. companies could create 2 resellers across europe, split the revenue and avoid the tax. It's not less brazen than their current dodging schemes and it just shows the impossibility of taxation under global free trade. It's also very p…
> The commission’s planned revenue tax, which is expected to be proposed on March 21, would only represent a targeted, short-term solution.
It seems to be targeted at big tech giants specifically. Good luck splitting Alphabet, Facebook and Apple.
> the impossibility of taxation under global free trade
They wish.
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#215Earlier quoted context omitted.
I can think of a few off the top of my head. Bouncycastle (a crypto library) is hosted in Australia because I think the US crypt laws want to ban the export (download) of military grade munitions. Great Gatsby (the novel) is free to download if hosted in Australia. In the US, the copyright laws forbid the download of Great Gatsby mainly because of Disney. Ever wonder why Mickey Mouse isn't in public domain? Also, if…
Is hosting not analogous to warehouseing? I mean if you warehouse pot in the us and sell in Amsterdam you're still violating local laws based on where your warehouse is and if you host the great Gatsby in the us to deliver to Australia then you're violating local laws where you are hosting too. You can reverse it and have pot in the Netherlands or great Gatsby in Australia to send to the US, but weve had the term smu…
> Is hosting not analogous to warehouseing?
It's not clear what is and what is not being hosted. Let's take Google for an example.
Google has datacenters all over the world. You could make a case that Gmail makes no money on its own, that all the money comes from ads.
Fine, host all the servers that serve Gmail on its own in a local country to reduce latency, and serve all ads from a server in a tax haven.
Who do you tax? The tax haven has no taxes, and Gmail itself is a net expense, as you have to pay for labor, servers, power, and bandwidth.
> You can reverse it and have pot in the Netherlands or great Gatsby in Australia to send to the US, but weve had the term smuggling to cover that situation as well.
That is incorrect. You can download Great Gatsby instantly in the US right now[0]. Project Gutenberg prevents German users from downloading books[1].
All these extra laws are doing is making it so new companies have more hoops to jump through and large existing companies have the lawyers and money to figure out how to skirt the rules.
[0] http://gutenberg.net.au/ebooks02/0200041.txt Don't download if you're in the states.
[1] https://goodereader.com/blog/e-book-news/project-gutenberg-b...
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#216Personally, I like this proposal. I like that it's simple: any overly complex system will almost inevitably result in distortion and loopholes. A few points of my favorite points: * It's done on revenues and not profits. This avoids the impossible question of where profits are realized: if you make money in one country but displace that earning by costs somewhere else, it's practically impossible to determine where t…
> Personally, I like this proposal It is meant to be a popular proposal that will win lots of likes for the EU, but it's stupid on the face of it and it will end up comically abused. E.g. companies could create 2 resellers across europe, split the revenue and avoid the tax. It's not less brazen than their current dodging schemes and it just shows the impossibility of taxation under global free trade. It's also very p…
> companies could create 2 resellers across europe, split the revenue and avoid the tax
That's exactly the point of taxing revenue: under a profit-based taxation scheme you'd end up with a net profit of zero. Revenue taxation schemes would double-tax this setup.
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#217Earlier quoted context omitted.
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 U…
Having public officials on their platform is a benefit to them (network effects), and the marginal cost is as close to zero as to immeasurably different.
It's a negative to them - loss in quality of discussions on platform, with viewers of these politicians generally using more bandwidth than the host will be able to make up with ad revenue.
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#218Earlier quoted context omitted.
I can think of a few off the top of my head. Bouncycastle (a crypto library) is hosted in Australia because I think the US crypt laws want to ban the export (download) of military grade munitions. Great Gatsby (the novel) is free to download if hosted in Australia. In the US, the copyright laws forbid the download of Great Gatsby mainly because of Disney. Ever wonder why Mickey Mouse isn't in public domain? Also, if…
So if you're using the legal or perceptional advantages of trading "out" of Australia (or the UK, or wherever)... why shouldn't you be subject to laws, including tax laws, there?
That is what the VAT, customs, and personal income tax is for.
It's relatively easy to keep track of just where money comes from for a purchase, and where stuff is delivered. If you actually reside there and use the services that's one thing - and you can tax the purchase for the purchaser. Taxing sources is far harder, and virtually impossible for virtual goods.
Should we tax CNDs for a percentage of Netflix and Amazon traffic they serve? Or should companies figure out exactly what is or is not cached in a particular country to find their tax rates?
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#219Earlier quoted context omitted.
> The best thing about this proposal is that it sets up a harmonious relationship It does the exact opposite. It spurs a further acrimonious relationship between the major economies of the EU and the US. Particularly France and Germany, which are a combined outsized share of the EU economy and represent ~80% of the trade deficit that the US has with the EU. This new tariff exists solely because the EU can't compete o…
>This new tariff exists solely because the EU can't compete on technology and needs to raise barriers. I'd argue it's a shield against unfair competition. US tech companies have a huge first mover advantage. They use that advantage to attract foreign talent and employ that talent to extract value globally. It seems reasonable to expect a financial contribution for access to foreign markets given the quasi monopolisti…
Before Facebook there was Myspace. What first mover advantage did Facebook have?
Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan
#220Can't tech giants just split their EU operations in 2, and thus split the revenue, and thus dodge the tax
The parent company will have the revenue of both. If there is no parent company they have effectively spun off a separate business.
each could ship their profits to separate companies (parented by google) outside the EU,