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

#301

Post by throwaway77384 » Mon, Mar 19, 2018, 4:01 PM UTC

wtfstatists wrote: post #210

throwaway77384 wrote: post #202

Earlier quoted context omitted.

What you are describing are Trump's steel tariffs, which indeed make no sense and do exactly what you say. I believe what the EU has realised, is, that trying to tax the profits of corporations that will simply move them around and declare them wherever they don't have to pay taxes on them, is a game of cat and mouse the EU can't win. So, they decided to go a different route. When Google decided they could negotiate…

> The EU needs to show that the social contract is non-negotiable, By raising new consumption tax ? Its not going to work. Thats not how you fund socialism lol.

Apologies, I may not have been clear enough in my formulation there. I meant the social contract, as in: You pay taxes and get something in return. For some people it may also be something like 'you work hard and therefore get to live a reasonably comfortable life'. The social contract, for me, is simply about making sure everyone plays by the same rules.

Socialism is a completely different topic. I wouldn't even know how to define it, considering how many wildly different definitions of it there are. I think the regulated markets, like Germany and Scandinavian countries have a nice model, but even the crazy American model would be fine, if the rules were the same for everyone.

Again, I was not talking about socialism or how to fund it.

By the way, you mentioned that this consumption tax is not how you fund socialism. How do you fund socialism? I'd be very interested to hear your perspective :)

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

#302

Post by slivym » Mon, Mar 19, 2018, 4:27 PM UTC

3pt14159 wrote: post #236

jfasi wrote: post #195

Personally, 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…

I have yet to talk to someone that can explain to me why a VAT wouldn't be better. We already know how VATs work, they're already fair, they already handle low-margin companies very well. Why bother with a revenue tax? It heavily stilts the game in favour of bigger players because it encourages vertical integration. I agree that our largest tech companies are already too powerful and need to have a higher tax burden…

Correct me if I'm wrong, but VAT is only applied to goods sold to consumers, not to companies. If I'm a VAT registered company (like Facebook) and I buy a VAT-able item like a computer (from MSFT), I don't pay VAT.

So similarly, if I'm a computer manufacturer (MSFT) and want to buy VAT-able advertising (from Facebook) then I don't actually pay VAT.

So in what way would this lead to tech giants that primarily sell B2B being taxed?

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

#303

Post by Yptur » Mon, Mar 19, 2018, 8:48 PM UTC

rmah wrote: post #256

TheCoelacanth wrote: post #83

Earlier quoted context omitted.

This is not a tax on global revenues. It is a tax on EU revenues. This article does not make that clear but other articles about the subject[1][2] include that important detail. [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...

It really is a tax on global revenues. It's a tax on global revenues that is enabled by the fact that EU residents get services for free, which enable the global revenues. But the companies are also paying a VAT/GST/sales tax on some of those revenues in nations that charge them. Let's use lumber as an analogy. Let's say the trees are in nation A. And a company from nation B is cutting them them down to make lumber (…

I don't really see where the problem with that is. If it bothers company B so much they can just look for a different market right?

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

#304

Post by kgwgk » Mon, Mar 19, 2018, 9:03 PM UTC

3pt14159 wrote: post #299

kgwgk wrote: post #285

Earlier quoted context omitted.

The whole discussion is about targetting some particular companies. That explains why a VAT, which is paid by the consumer anyway, wouldn't be better. If you’re going to distort the VAT chain to be get something equivalent to a tax on the sales of specific companies, how is it going to be better?

Because by doing a standard deduction you're keeping certain mathematical properties that VATs provide, like the ability to sell a good multiple times without paying layered taxes. Standard deductions stop this warping while still providing the warping that is desired. And saying a VAT is paid by the consumer is silly. All taxes are paid by the consumer ultimately. What matters is capturing the taxation in a locality…

> If CocaCola sells $10B of Coke in the EU, a VAT captures that and it should.

If I understand correctly, you propose to eliminate corporate taxes and go from the current system (taxes on consumption and taxes on corporate profits) to a pure consumption-tax system.

In that case, when CocaCola sells $10B or LossMakingSoda sells $10B (or ExtremelyProfitableCo sells $10B) the taxman gets the same amount (directly from the consumer, and not just conceptually). It’s natural that governments want to extract more money from those companies that have more money.

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

#305

Post by conanbatt » Mon, Mar 19, 2018, 9:31 PM UTC

AnthonyMouse wrote: post #294

conanbatt wrote: post #288

Earlier quoted context omitted.

If it was in equilibrium before the tax, the addition of the tax would favor google.

> If it was in equilibrium before the tax, the addition of the tax would favor google. If it was in equilibrium then they would both have the same margins. Something has to be different or everything is the same. And by far the most common reason for a company to have higher margins is that it has higher risk. Otherwise the investors would already be investing only in the business model that makes more money without…

> If it was in equilibrium then they would both have the same margins. Something has to be different or everything is the same.

You can have different margins and different volumes, with the same rate of profits for capital invested.

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

#306

Post by jackvalentine » Mon, Mar 19, 2018, 11:13 PM UTC

jimmywanger wrote: post #290

jackvalentine wrote: post #279

Earlier quoted context omitted.

I genuinely don’t see how you find this so confusing and you’re using wildly disparate examples that don’t all make the same point. I’m not interested in taking part in this outrage feat.

I see you're not interested in having discourse. I genuinely don't see how you don't find this confusing. Is just having a co.uk web address a reason to pay taxes there? There are many locations associated with you these days. The one you're living in, the one your business is in, the one where your goods are manufactured in, the one you store the goods, the one your website is hosted in, and the one that you declare…

> . Is just having a co.uk web address a reason to pay taxes there?

That wasn't your example - your example was selling using the amazon.co.uk market.

You can't even keep your own examples straight, no wonder you're confused.

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

#307

Post by AnthonyMouse » Tue, Mar 20, 2018, 3:12 PM UTC

conanbatt wrote: post #305

AnthonyMouse wrote: post #294

Earlier quoted context omitted.

> If it was in equilibrium before the tax, the addition of the tax would favor google. If it was in equilibrium then they would both have the same margins. Something has to be different or everything is the same. And by far the most common reason for a company to have higher margins is that it has higher risk. Otherwise the investors would already be investing only in the business model that makes more money without…

> If it was in equilibrium then they would both have the same margins. Something has to be different or everything is the same. You can have different margins and different volumes, with the same rate of profits for capital invested.

> You can have different margins and different volumes, with the same rate of profits for capital invested.

Having the same historical returns isn't the same as having the same risk-adjusted returns.

Having higher margins is a risk unto itself. A low-volume high-margin store might have the same total profits as a high-volume low-margin store, but move them next to each other selling equivalent products and you know which one is going out of business.

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

#308

Post by jimmywanger » Wed, Mar 21, 2018, 5:54 AM UTC

jackvalentine wrote: post #306

jimmywanger wrote: post #290

Earlier quoted context omitted.

I see you're not interested in having discourse. I genuinely don't see how you don't find this confusing. Is just having a co.uk web address a reason to pay taxes there? There are many locations associated with you these days. The one you're living in, the one your business is in, the one where your goods are manufactured in, the one you store the goods, the one your website is hosted in, and the one that you declare…

> . Is just having a co.uk web address a reason to pay taxes there? That wasn't your example - your example was selling using the amazon.co.uk market. You can't even keep your own examples straight, no wonder you're confused.

> You can't even keep your own examples straight, no wonder you're confused.

Not at all. The market your product reaches is important.

Hosting and domains, not as much. Selling on the amazon.co.uk market is just like selling on amazon.com. Except you have to deal with less hassle when actually shipping to UK buyers. What part of that is confused? Please respond. You're resorting to ad hominem attacks.

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

#309

Post by jimmywanger » Wed, Mar 21, 2018, 5:57 AM UTC

sjg007 wrote: post #292

jimmywanger wrote: post #67

Earlier quoted context omitted.

> 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.…

I don't think you understand how international commerce actually works. If your warehouse is in the USA and someone from the UK orders from you, you can ship the product to them tax free but they will pay an import duty on that item based on the UK value of the item. Google has to pay tax on the advertisement to the UK buyer. This is because the revenue (aka the user clicking on the ad to buy your widget) was adverti…

You're not counting ppv ads. If you click on a webpage, and the advertisers get some money from you clicking on the link, you're going to get taxed even though you did not really do anything?

Please explain that to me. How you can be forced into being a tax liability for a company.

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

#310

Post by dahdum » Thu, Mar 22, 2018, 6:19 PM UTC

mattmanser wrote: post #255

MarkMc wrote: post #252

Earlier quoted context omitted.

There is already some form of taxation - VAT in the UK is 20%. Why does the UK deserve more than 20%, given that the vast majority of Google and Facebook's engineers and managers are in the US?

You don't understand how VAT works. If I spend £100 on AdWords as a company, the £20 VAT comes off my VAT bill. I pay £20 less. So Google's VAT bill is utterly inconsequential and meaningless. VAT is only paid once by consumers for products , advertising is a company expense that simply shifts the VAT one level down the chain. It doesn't get applied at every level on the supply chain, it gets passed down. So if Amy's…

Is this tax structured in a way to prevent collection from the consumer, so it appears as a line item next to VAT? If not, the difference will be moot for most consumers.