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Tech giants face 2% UK digital services tax

bbc.com

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Re: Tech giants face 2% UK digital services tax

#91

Post by KineticLensman »

pjc50 wrote: post #80
jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

The tech giants are free services! Adding 2% to the price of Facebook leaves it still free! I know it's a dogmatic talking point that you have to make to pretend that tax incidence is pointless, but it doesn't work here.

> The tech giants are free services!

No - See [0] which is Facebook's own page about their charges. Either Facebook will soak the additional costs up and / or pass them them on their paying users - the advertisers. Who may in turn pass the increased ad costs to the buyers of the advertised products / services and/or cut internal costs. Something like that.

[0] https://www.facebook.com/business/help/201828586525529?ref=f...

Re: Tech giants face 2% UK digital services tax

#92

Post by cortesoft »

samspenc wrote: post #71
biggio wrote: post #28

Earlier quoted context omitted.

Is this true? Edit: holy moly it is! https://metro.co.uk/2018/10/12/ed-sheeran-may-be-the-worlds-...

That article seems to be confusing revenue with profit. The $2 billion Amazon made in the UK is revenue; I suspect its profit is actually smaller.

Yeah, that confusion is made clear by the earlier statement that he made `1/5` the profit.... he did not make $400 million, which is 1/5th of 2 billion. It says he made $37 million.

Re: Tech giants face 2% UK digital services tax

#94

Post by tomatocracy »

Marazan wrote: post #61
chrisseaton wrote: post #43

Earlier quoted context omitted.

The fact that they changed the law rather than used the existing one makes it crystal clear that it was legal.

Not really. The GAAR makes many "technically legal" schemes illegal. But it requires expensive and long litigation by Hmrc to prove it. Passing a new law short circuits the process.

And the GAAR also by their own admission covers rather less than you imply anyway which is why litigation is likely to be involved. The official guidance[1] specifically cites circumstances which are not (in HMRCs view) caught by it (eg nominating a different residence every month as your primary residence in order to benefit from additional reliefs which extend for longer than the month on multiple properties and effectively completely avoid capital gains tax) which you might have thought would be caught.

[1] https://www.gov.uk/government/collections/tax-avoidance-gene...

Re: Tech giants face 2% UK digital services tax

#96

Post by lallysingh »

Lio wrote: post #81
jedberg wrote: post #65

This will only hurt the people who live in the UK. Those companies will just raise their prices to cover the tax. Sure maybe the local companies could then undercut Amazon if they somehow don't have to pay the tax, but eventually they'll just raise their rates to match because why give up the profit margin if they don't have to? It doesn't matter anyway, the tax will never happen. They're just using it as a point of…

If Amazon raised their prices to cover the tax they're not currently paying High Street retail shops would at least stand a fighting chance against them.

You'd still have to leave the house, and look up reviews yourself.

Re: Tech giants face 2% UK digital services tax

#97

Post by ascorbic »

stephengillie wrote: post #10

They'll probably back down when companies threaten to leave. Like Amazon did when threatened with the Head Tax. Or how Dole left Hawaii.

This isn't like threatening to move offices, which doesn't cost them revenue. The UK is one Amazon's largest markets. Facebook and Google both make billions of dollars in sales in the UK. They're not going to forgo that.

Re: Tech giants face 2% UK digital services tax

#98

Post by mr_toad »

nurino wrote: post #66
repsilat wrote: post #50

Earlier quoted context omitted.

A level playing field makes sense, and domestic companies are at a disadvantage if their local profits are taxed while foreign companies' "local profits" are taxed offshore at a lower rate. That said, this doesn't level the playing field, it tips it towards local companies. The tax on business revenues should apply to domestic companies as well, and it should apply to businesses of all sizes. If it has to be netted a…

There's absolutely nothing wrong with a government tipping the playing field towards local companies.

There’s totally something wrong with favouring local businesses owners at the expense of local consumers. The benefits accrue mostly to people with incomes far in excess of the average.

Re: Tech giants face 2% UK digital services tax

#99

Post by pcurve »

"The Treasury forecasts that the tax will generate £275m in 2019-20, rising to £370m in the following year.

It then expects that digital services tax receipts will reach £400m in 2021-22 and £440m the year after. "

Smaller amount than I expected, but still a good chunk of change.

Re: Tech giants face 2% UK digital services tax

#100

Post by Brakenshire »

robot wrote: post #95

This is a pretty good idea. Tech giants make money in Europe paying little to no tax incorporating in Ireland, while all small to medium businesses incorporated in the UK pay the usual tax. Its simply unfair.

Yes, if the money was going back to the States and being paid as corporation tax over there, that’s one thing, but companies hoard the money offshore and pay no tax. It basically means that large companies get a 15-20% advantage over small companies, and that is clearly unacceptable.
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