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

France Plans 5% Digital Tax as Governments Chase Internet Giants

bloomberg.com

Post reply on HN
Print view View original

81–90 of 304 posts

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

#81

Post by Marazan »

A key feature in many obfuscated corporate structures designed to avoid tax is differing corporate structure declarations in different tax juristictions.

As companies are made up of many different sub companies by declaring your corporate structure as one way to the US tax authorities and another to the, say, Luxembourg tax authorities you can make intra group loans appear and disappear from different sets of accounts. And as a result the costs and, crucially, income from those 'loans' materialise wherever you want. Or not appear at all.

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

#82

Post by pjc50 »

crazygringo wrote: post #74
alkonaut wrote: post #68

Earlier quoted context omitted.

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…

That would be a nightmare. First, tax laws don't have clear intentions to begin with -- if a tax law passes with 51 out of 100 votes in the legislature, all 51 representatives could be supporting the "letter" of the law for 51 different actual intentions, many of which might not be noble in the first place (e.g. give a particular local factory a tax break to win more votes next election). Second, because of this, "in…

The usual solution is a "General anti-avoidance rule" (GAAR). This doesn't get into the intent of the tax law, only into the intent of the business action. If there would be a simpler, more natural, and otherwise cheaper way to do it, but it's been done a particular way to avoid tax, then it's unlawful.

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

#83

Post by cheerlessbog »

ui-explorer12 wrote: post #26
madeofpalk wrote: post #16

Earlier quoted context omitted.

What's 'tax avoidance'? Doesn't everyone avoid tax when they claim expenses and make deductions?

yes - so maximizing your use of any method to reduce your tax burden is (a) the smart thing to do and (b) the (a )moral imperative of a corporation. not a judgement call, just not sure how you frame the raison d'etre for something that oesn't embody life to begin with.

Why moral imperative? Perhaps you mean ethical or legal, but is not even legally required, so far as I know, that a corporation must maximize return to investors.

More broadly, society created the concept of the corporation and imbued it with valuable privileges such as limited liability and a potentially favorable tax regime. Some argue it would be morally reasonable to require it balance the interests of stakeholders.

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

#84

Post by iguy »

cheerlessbog wrote: post #78
cpursley wrote: post #60

Earlier quoted context omitted.

Banning tax evasion is easy. Just get rid of corporate income taxes and replace it with a sales tax. It's not like corporations pay taxes anyways; their customers do as tax is built into the cost of products.

That wouldn't prevent some of the shenanigans described above. For example, giving my IP away for cheap to a subsidiary in a low tax jurisdiction that actually performs the sale.

No, it would, that's the point. If your subsidiary in the Bahamas sells something in France, it pays French VAT.

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

#85

Post by lr4444lr »

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?

Anything taxed has to have an asset value determined for it, and reliably recorded. This is extremely complicated to enforce on almost anything if you sit down and really think about how - if it were the only thing you had of value to offer - you might be able to hide it's true value.

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

#86

Post by cheerlessbog »

puzzle wrote: post #52
beagle3 wrote: post #47

Earlier quoted context omitted.

Money collected for services rendered through a French IP. That is, on ads shown to French viewers, on GSuite accounts paid while connected to a French IP address, etc.

The money is collected by Google Ireland. So they're going to charge Google Ireland? It's probably safe to assume they're not charging Google LLC in Delaware.

Presumably France has access to the not in considerable French origin advertising revenues.

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

#87

Post by Nimitz14 »

throwaway_9168 wrote: post #76

This reminds me of a horrible tax I came to know of recently - something called the EU VAT MOSS on digital goods. Apparently, it is supposed to target giants like Amazon who route money via multiple countries to evade taxes. Not surprisingly, this ends up affecting the smallest players most drastically. Worst, the glib language used to describe who should pay the tax is utterly confusing. As always, this means the ac…

It took me 5min of googling to find out VAT MOSS

> MOSS means you don't need to register with tax authorities in every EU country you sell to, instead, you can register for VAT, file VAT returns and make payments in one single place.

Sounds pretty great to me.

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

#88

Post by lr4444lr »

cpursley wrote: post #60
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?

Banning tax evasion is easy. Just get rid of corporate income taxes and replace it with a sales tax. It's not like corporations pay taxes anyways; their customers do as tax is built into the cost of products.

... and you ban cash and all ad hoc barter networks. Good luck.

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

#89

Post by laurentl »

throwaway_9168 wrote: post #76

This reminds me of a horrible tax I came to know of recently - something called the EU VAT MOSS on digital goods. Apparently, it is supposed to target giants like Amazon who route money via multiple countries to evade taxes. Not surprisingly, this ends up affecting the smallest players most drastically. Worst, the glib language used to describe who should pay the tax is utterly confusing. As always, this means the ac…

I didn’t know what this was, so I checked (https://europa.eu/youreurope/business/taxation/vat/vat-digit...). Long story short: MOSS stands for “mini one stop shop” and looks explicitely designed to make it easier to sell across the EU.

> The Mini One-Stop-Shop (MOSS Scheme) enables you to supply digital services within the EU without the need to register in each EU country you supply to. It can be used by both EU-based businesses and non-EU businesses.

Honestly from reading the quick description of the law, if I was a business I would definitely try to take advantage of the law instead of registering in different countries for the single purposes of paying VAT.

I get that some payment actors allow you to do that easily, while others don’t (yet), and yes this would be a criterion in choosing a payment gateway. But apart from that, I don’t really see how this law is evil, or an illustration that Eurocrats don’t know anything about business (there are plenty of other examples, but this isn’t one). Can you explain in which way the MOSS is “horrible”?

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

#90

Post by Fnoord »

RHSeeger wrote: post #70
alkonaut wrote: post #68

Earlier quoted context omitted.

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.

> 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 [...]

You can say the same about law in general, yet law isn't "simple and explicit". It is very complex, hard to grok, therefore only a small amount of people are able to, leading to expensive lawyers and a law system which the poor cannot afford (ie. class justice).

Yes, ideally I also want laws to be simple and explicit. I'd even argue that worked quite well before globalization. Now it doesn't anymore. We need to adapt.

Post reply on HN