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France Plans 5% Digital Tax as Governments Chase Internet Giants

bloomberg.com

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Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#31

Post by izacus »

gzeus wrote: post #29
yoz-y wrote: post #7

Earlier quoted context omitted.

It's because for an international company there is really no clear cut way to say what is tax evasion and what is not. If your company is incorporated in France, has offices in Ireland and serves customers all over the world, how do you calculate where to pay what? Sovereign countries are free to set their tax rate to 0 in order to attract companies there.

But shouldn't they like pay taxes for where the customer is from? Suppose a guy from US purchases the service, shouldn't tax be paid there. Isn't that how its supposed to work? Taking only in terms of Giants.

It gets really hairy in cases like Google and Facebook, where the guy paying the service might be a US agency paying to show ads to YouTube/FB users in Europe.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#34

Post by kartan »

awestroke wrote: post #19
sjwpv wrote: post #10

Earlier quoted context omitted.

>Sovereign countries are free to set their tax rate to 0 in order to attract companies there. Then those companies should only sell products and services in those countries. Otherwise, something should be done about it. I'm not saying it's easy, but it can be improved.

So exporting should be illegal?

Doing business with tax havens should be illegal. A tax Haven creates an agreement between companies and a country to steal another country tax reveneu.

Tax havens produce close to nothing, so they have very small exports. It's just a legal arrangement that has nothing to do with production.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#35

Post by yoz-y »

gzeus wrote: post #29
yoz-y wrote: post #7

Earlier quoted context omitted.

It's because for an international company there is really no clear cut way to say what is tax evasion and what is not. If your company is incorporated in France, has offices in Ireland and serves customers all over the world, how do you calculate where to pay what? Sovereign countries are free to set their tax rate to 0 in order to attract companies there.

But shouldn't they like pay taxes for where the customer is from? Suppose a guy from US purchases the service, shouldn't tax be paid there. Isn't that how its supposed to work? Taking only in terms of Giants.

Note that there already is a tax that people are paying 'where the customers are'. It's the VAT, which is one of the biggest sources of income for a state.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#36

Post by Veelox »

gzeus wrote: post #29
yoz-y wrote: post #7

Earlier quoted context omitted.

It's because for an international company there is really no clear cut way to say what is tax evasion and what is not. If your company is incorporated in France, has offices in Ireland and serves customers all over the world, how do you calculate where to pay what? Sovereign countries are free to set their tax rate to 0 in order to attract companies there.

But shouldn't they like pay taxes for where the customer is from? Suppose a guy from US purchases the service, shouldn't tax be paid there. Isn't that how its supposed to work? Taking only in terms of Giants.

To complicate the situation, a French citizen, living in Spain, the sole owner of a company incorporated in Ireland, buys software from an American company to run for a customer in Brazil.

Which country/countries should be able to tax the revenue?

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#37

Post by roenxi »

platz wrote: post #21
yoz-y wrote: post #7

Earlier quoted context omitted.

It's because for an international company there is really no clear cut way to say what is tax evasion and what is not. If your company is incorporated in France, has offices in Ireland and serves customers all over the world, how do you calculate where to pay what? Sovereign countries are free to set their tax rate to 0 in order to attract companies there.

I'm pretty sure Google does not have a problem figuring out that the source of it's profits are not occuring in Ireland.

There is no science to what the 'correct' level of tax is, and assigning which part of a multinational corporation is responsible for what dollar of profit is genuinely complicated.

As long as they are playing by the rules, no company has an obligation to try and guess what level of tax is fair for them to pay. Since they are taxed according to their interpretation of the situation (as represented in their account books) there isn't anything wrong with choosing an interpretation that is tax effective.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#38

Post by yoz-y »

platz wrote: post #21
yoz-y wrote: post #7

Earlier quoted context omitted.

It's because for an international company there is really no clear cut way to say what is tax evasion and what is not. If your company is incorporated in France, has offices in Ireland and serves customers all over the world, how do you calculate where to pay what? Sovereign countries are free to set their tax rate to 0 in order to attract companies there.

I'm pretty sure Google does not have a problem figuring out that the source of it's profits are not occuring in Ireland.

I'm merely stating why "make avoiding taxes illegal" is not a clear cut thing. Apple got to pay over 11 billion of back taxes to Ireland and another 500 million to France for example, so if there is clear fraud it's easy.

The difficulty is to have a legal framework and not just some judge saying "I'll know it's porn when I see it".

This being said I am not a lawyer.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#40

Post by 3pt14159 »

yann63 wrote: post #2

Couldn't we just ban tax evasion? What makes it so hard? (honest question) A recent European study has shown that the more company win money, the less they pay in taxes (in percentage). Is it because of bad laws? Corrupt politicians? Something else?

Political economy and a race to the bottom. Though take hope, there are many people working on this and the silver lining of tech's centralization is that it will be easy to chase them down once the right laws are in place.
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