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France Plans 5% Digital Tax as Governments Chase Internet Giants

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

#61

Post by TomVDB »

bobl wrote: post #59
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?

Europe is losing ~globalization and we are fighting over the scraps. Which European country do you think will be overall obviously better in ten years? And not in the sense that "everything gets better", but in the sense of having a high rate of success in converting progress to prosperity. I don't know of any.

What exactly are they losing?

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

#62

Post by snarf21 »

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?

As others have said, it isn't evasion but avoidance. The issue is that there a lot of ways to put the money on the books wherever you want it. Let's say you want to sell mobile phones. You could create one company in France that builds, buys and sells phones. In this case it becomes pretty clear it is a French company and all the money will be taxed in France. But let's say you have that same company and split it up into three companies. You put your corporate company A in Ireland. That company A owns a company B in India that makes the phones. The corporate company A also owns a company C in France that only sells phones. Company A can decide which company is profitable by deciding who much B charges C for the phones they make. Company A can also charge B and C consulting fees for helping to run their businesses. Basically A can decide which of the three companies is profitable and make the others even "lose" money as far as the accounting goes. It is now very unclear if this is a French company and at who's tax laws the money should be assessed. Obviously, the company A can make this much more complicated. It is also really hard to know which of these organizational things are about tax avoidance and what is about efficiency of manufacturing and running a business.

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

#63

Post by sokoloff »

platz wrote: post #57
sokoloff wrote: post #50

Earlier quoted context omitted.

It's not that a simple answer can't be obtained, it's that many different simple answers can be obtained...

sure, if you are trying to solve the fully parametric abstract equation over all possible inputs, which is precisely what I was saying to try to avoid. In absence of a grand unified theory, tackle obvious concrete instances when they crop up. If the different "simple" answers (which I am not sure exactly what that means) solve the problem, then I really do not care if there is some equivalence principle there; just p…

The problem can be roughly stated as: For a company registered in country I, selling product/service in country F, with inputs licensed from and/or created in countries N, U, B, G, A, and C, and costs incurred in a potentially different set of countries, what's the amount of tax due to each country represented in the graph?

There are many simple answers to that question; who gets to decide which simple answer is the one enacted? Countries F, I, and U are likely to disagree on which simple answer is "best", which is why we rely on laws and courts to frame and adjudicate the issue.

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

#64

Post by microcolonel »

diarmuidc wrote: post #56
josefx wrote: post #49

Earlier quoted context omitted.

> without any honest attempt at simplification, broad application or coordination with other jurisdictions. The problem with that is that the other jurisdictions have no interest in closing tax loopholes. The irish bend over backwards to let Apples unique sheme qualify as double irish (their tax office had to issue several private rulings) and they had no interest in getting rid of the double irish itself either. For…

The double Irish was gotten rid of in 2015 https://www.investopedia.com/terms/d/double-irish-with-a-dut...

You can see the impact of that crackdown in their tax receipts and tax to GDP ratio. Government revenue from Double Irish tax arrangements was fully 5% of their GDP.

https://data.oecd.org/tax/tax-revenue.htm

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

#65

Post by microcolonel »

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?

The problem is that European politicians and their sympathizers have gone to great lengths to make you think it is tax evasion that they are policing. Tax evasion is illegal, these companies read the rules and follow them, but in the EU they are still in jeopardy in the courts, because the courts are arbitrary.

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

#66

Post by Leader2light »

Anyone following French news already knows they are hurting for money and screwed long term. Same story with Britain. Hell, the same story with most of the world.

Nobody can pay for all these massive social programs, the tax base is simply not big enough. Too many people are freeloaders. Migrants are also a huge issue. The working class and middle class are tapped out.

Just look up the yellow jacket protesters in France. Look up Brexit. These are all symptoms of the same problems. Europe is going to see a huge influx of African's during the next 50 years. Their society is on the brink.

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

#67

Post by microcolonel »

In France, taxes account for an ever increasing proportion of a stagnant GDP. Nobody stops to ask if a "Digital Tax" makes any sense: are they saying that digital properties make use of some public resource without taxation, or is this just basically a tariff?

[0]: https://data.oecd.org/tax/tax-revenue.htm

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

#68

Post by alkonaut »

snarf21 wrote: post #62
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?

As others have said, it isn't evasion but avoidance. The issue is that there a lot of ways to put the money on the books wherever you want it. Let's say you want to sell mobile phones. You could create one company in France that builds, buys and sells phones. In this case it becomes pretty clear it is a French company and all the money will be taxed in France. But let's say you have that same company and split it up…

The difference between avoidance and evasion is only relevant if you have tax law interpreted to the letter only.

Tax law should be interpreted by the lawmakers intention and companies should be ready to be fined or uptaxed if authorities find they pay less taxes than is reasonable given global profits and relative turnover within their jurisdiction.

Constructs such as paying “royalties” to parent companies, or taking very expensive internal loans to effectively move all profits to tax havens (using Dutch BV’s etc) should simply be outlawed. Countries simply shouldn’t recognize these as acceptable practices.

This obviously leads to what companies like to call a “hostile business climate” - so a country will need to be pretty attractive in other aspects to not scare off international business.

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

#69

Post by nradov »

alkonaut wrote: post #68
snarf21 wrote: post #62

Earlier quoted context omitted.

As others have said, it isn't evasion but avoidance. The issue is that there a lot of ways to put the money on the books wherever you want it. Let's say you want to sell mobile phones. You could create one company in France that builds, buys and sells phones. In this case it becomes pretty clear it is a French company and all the money will be taxed in France. But let's say you have that same company and split it up…

The difference between avoidance and evasion is only relevant if you have tax law interpreted to the letter only. Tax law should be interpreted by the lawmakers intention and companies should be ready to be fined or uptaxed if authorities find they pay less taxes than is reasonable given global profits and relative turnover within their jurisdiction. Constructs such as paying “royalties” to parent companies, or takin…

It's unreasonable to expect judges to divine lawmakers' intent on subtle issues of tax policy. If lawmakers want a tax to work a certain way then they need to just write that down so that it's clear to everyone.

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

#70

Post by RHSeeger »

alkonaut wrote: post #68
snarf21 wrote: post #62

Earlier quoted context omitted.

As others have said, it isn't evasion but avoidance. The issue is that there a lot of ways to put the money on the books wherever you want it. Let's say you want to sell mobile phones. You could create one company in France that builds, buys and sells phones. In this case it becomes pretty clear it is a French company and all the money will be taxed in France. But let's say you have that same company and split it up…

The difference between avoidance and evasion is only relevant if you have tax law interpreted to the letter only. Tax law should be interpreted by the lawmakers intention and companies should be ready to be fined or uptaxed if authorities find they pay less taxes than is reasonable given global profits and relative turnover within their jurisdiction. Constructs such as paying “royalties” to parent companies, or takin…

I disagree. Tax laws should be simple and explicit. The people in charge change over time. I don't trust that the people later will interpret the laws the same way as the people today, or that either will interpret the laws the same way they were intended, or that the group of people that wrote the laws all had the same intent.
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