Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Three European Countries Block Tax on Tech Giants

bloomberg.com

Post reply on HN
Print view View original

11–20 of 324 posts

Re: Three European Countries Block Tax on Tech Giants

#11

Post by 7000skeletons »

Lio wrote: post #5
7000skeletons wrote: post #2

I didn't even need to click the link to know that Ireland was gonna be one of the three. It's like they have a vested interest, or something.

Yes they're an obvious one. I was surprised though that Luxembourg wasn't listed whist Sweden and Denmark are. I'd be interested to here their objects if anyone can point at a fuller article or discussion of the issues.

This is from earlier this year, so the debate may have progressed since then, but Sweden and Denmarks' concerns seem to stem from the way in which the EU aims to apply the tax.

>“A digital services tax deviates from fundamental principles of income taxation by applying the tax on gross income, i.e. without regard to whether the taxpayer is making a profit or not,” Swedish Finance Minister Magdalena Andersson, and her counterparts from Denmark and Finland, Kristian Jensen and Petteri Orpo, said in a joint statement on Friday.

https://www.reuters.com/article/us-eu-digital-tax/nordic-cou...

Re: Three European Countries Block Tax on Tech Giants

#12

Post by ckastner »

The article doesn't say why Denmark, Ireland and Sweden opposed, but from a referenced article [1]:

> Spearheaded by France, the plan has met resistance from countries such as Ireland and Sweden, which question the wisdom of the EU going it alone given the global nature of digital services.

First, not all services are digital, especially not Amazon packages.

Second, the "global nature" is a technological aspect. The corporations themselves are local to some jurisdiction, as are their clients.

This argument is similar to computing in the "Cloud": Technologically, the service is perhaps global, but the physical manifestation of it certainly isn't. That data center is located somewhere, and when it goes down, one is reminded of the limitations of the "global" aspect.

[1] https://www.bloomberg.com/news/articles/2018-11-05/eu-s-divi...

Re: Three European Countries Block Tax on Tech Giants

#13

Post by mrleiter »

swarnie_ wrote: post #3

When one country can hold up the progress of the entire 27 member bloc because of their own self-interests the project looks very weak.

When it comes to taxation, a central sovereign measure, every member has to agree. Although the EU itself is something sui generis (or colloqually supranational), certain areas demand unanimous votes, especially those that are inherent to a nation‘s sovereignty.

Re: Three European Countries Block Tax on Tech Giants

#14

Post by swarnie_ »

ainiriand wrote: post #6
swarnie_ wrote: post #3

When one country can hold up the progress of the entire 27 member bloc because of their own self-interests the project looks very weak.

Can you elaborate? What kind of progress?

In this case its a tax on US technology companies.

Re: Three European Countries Block Tax on Tech Giants

#15

Post by swarnie_ »

pfortuny wrote: post #7
swarnie_ wrote: post #3

When one country can hold up the progress of the entire 27 member bloc because of their own self-interests the project looks very weak.

Ever heard of Brexit? Some people are a bit upset about that kind of governance. Me too.

Having voted for Brexit i can almost certainly say I've heard of it yes.

Re: Three European Countries Block Tax on Tech Giants

#16

Post by 8fingerlouie »

lordnacho wrote: post #4

I wonder if the placement of data centres has much to do with it? There's a bunch being built or in the pipeline at least in Denmark.

There are 2 Apple data centers being built in Denmark, and rumors of Google and Facebook ones as well.

As for the rejection of the tax, i honestly think it has more to do with avoiding double taxation.

Company taxes are at 22% in Denmark.

Denmark already collects 25% VAT on everything sold. If a 3% tax was to be imposed on "tech giants", it would ultimately end up being passed on to the consumer, effectively increasing retail price by 3% or more (depending if it's calculated as cost+28% or cost+3%+25%)

In the end it fails to accomplish the goal of forcing companies to pay local taxes instead of transferring them to wherever they can pay the least taxes, and instead drives up sale price and ultimately inflation.

Re: Three European Countries Block Tax on Tech Giants

#17

Post by gaius »

A company that leverages the favourable infrastructure and institutions of a country without paying its fair share is quite simply siphoning money from the taxpayers of that country into the pockets of its shareholders, the money that maintains that infra and those institutions. Politicians need to take a step back and realize that whatever jobs these companies bring, they are still a net loss to the country as a whole, the country would literally be better off if those people were unemployed!

Re: Three European Countries Block Tax on Tech Giants

#18

Post by shaki-dora »

swarnie_ wrote: post #3

When one country can hold up the progress of the entire 27 member bloc because of their own self-interests the project looks very weak.

The decision-making process has mostly moved to the so-called "double majority" (half + 1 of member states, comprising 50%(?) of the population).

Only some areas still require unanimous consent. And even those have historically not been insurmountable. What usually happens is a bundling of issues until you get an overall package that's net positive for everyone.

What helped, historically, was a fundamental willingness to act constructively, based on the common understanding of the EU's importance for both economic growth as well as stability and peace. I think it's easy to underestimate how large the horrors of the 20th century still loom in Europe.

That's why even something as controversial as the Greek crisis somehow ended in a compromise (of that singular kind that nobody is entirely happy with).

Of course recent history has shown some cracks in this idealized story, what with Brexit, Italy, Hungary, and Poland all going full Trump-idiocracy, and the EU being a rather excellent proxy for any nationalistic, xenophobic, anti-semitic, or otherwise egocentric jingoistic tribalism that lingered below the surface previously. It's kind of ironic that so many Europeans enthusiastically agree how much they hate each other. Agreeing as in: they have actual pan-european conferences and working groups where they apparently join in complaining about "them" subjugating "us", without ever realizing that Italy's "them" is Germany's "us", and vice versa. Anyway: exciting times!

Re: Three European Countries Block Tax on Tech Giants

#19

Post by C1sc0cat »

8fingerlouie wrote: post #16
lordnacho wrote: post #4

I wonder if the placement of data centres has much to do with it? There's a bunch being built or in the pipeline at least in Denmark.

There are 2 Apple data centers being built in Denmark, and rumors of Google and Facebook ones as well. As for the rejection of the tax, i honestly think it has more to do with avoiding double taxation. Company taxes are at 22% in Denmark. Denmark already collects 25% VAT on everything sold. If a 3% tax was to be imposed on "tech giants", it would ultimately end up being passed on to the consumer, effectively increasi…

Its a revenue tax not a sales tax - easier to enforce and less problematic legally than forcing profits to be booked locally.

and its not clear how paying taxes on local profit would have any more effect on consumers than taxing revenue

Re: Three European Countries Block Tax on Tech Giants

#20

Post by logifail »

ckastner wrote: post #12

The article doesn't say why Denmark, Ireland and Sweden opposed, but from a referenced article [1]: > Spearheaded by France, the plan has met resistance from countries such as Ireland and Sweden, which question the wisdom of the EU going it alone given the global nature of digital services. First, not all services are digital, especially not Amazon packages. Second, the "global nature" is a technological aspect. The…

>> The corporations themselves are local to some jurisdiction, as are their clients

My latest invoice from AMZN says "Sold by Amazon EU S.à r.l., UK Branch". Amazon EU S.à.r.l. is based in Luxembourg.

My order was one (single) LTO cleaning cartridge. Does anyone here think that cartridge even went anywhere near Luxembourg at any point between manufacture and reaching me?

I doubt it.

Post reply on HN