France Plans 5% Digital Tax as Governments Chase Internet Giants • Hacker News Board

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

#261

Post by sbacic » Mon, Mar 04, 2019, 7:02 AM UTC

BartBoch wrote: post #235

sbacic wrote: post #208

Earlier quoted context omitted.

There would be no race to the bottom if there was a real, tangible benefit to being established in a high tax country - ie, better public services, a more educated workforce, more business friendly environment, etc. As it is right now, very few countries justify their tax rates and that prompts people and businesses to do the rational thing and go where they pay less for the same thing. I think it's very concerning t…

I think you are completely missing what's going on... Google generates revenue in Poland. They have operations in Poland and all (so they use all the public goods like employees, infrastructure, safety etc.). They should pay taxes in tens of millions of Euros for this. But instead, they generate fake expense in Ireland, send an invoice to the Polish office, call it "branding" or something else, the invoice is big eno…

I'm genuinely curious - what operations does Google have in Poland? I was under the impression that all the "valuable" stuff was being made in the US and that their subsidiaries just handle localization, support and local sales. Is that incorrect?

If that is correct, then it makes perfect sense to shift profits - after all, it's not like Google Poland just came up with their new foobuz algorithm that is providing value. They're just selling it there.

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

#262

Post by sbacic » Mon, Mar 04, 2019, 7:03 AM UTC

NicoJuicy wrote: post #242

sbacic wrote: post #208

Earlier quoted context omitted.

There would be no race to the bottom if there was a real, tangible benefit to being established in a high tax country - ie, better public services, a more educated workforce, more business friendly environment, etc. As it is right now, very few countries justify their tax rates and that prompts people and businesses to do the rational thing and go where they pay less for the same thing. I think it's very concerning t…

You are pretty wrong. Taxes aren't about limiting market access, tariffs are. Taxes are ways to keep the money in the country, reinvest it so it ripples back to the civilians. Tech companies are avoiding this.

What is the difference between a tax, a tariff and a fine?

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

#263

Post by grondilu » Mon, Mar 04, 2019, 7:06 AM UTC

I'm French and I love Amazon. I buy many stuff on Amazon that I have absolutely no idea how I could get them otherwise.

That news makes me anxious about Amazon deciding not to offer its service in France one day.

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

#264

Post by sbacic » Mon, Mar 04, 2019, 7:12 AM UTC

anoncake wrote: post #229

sbacic wrote: post #208

Earlier quoted context omitted.

There would be no race to the bottom if there was a real, tangible benefit to being established in a high tax country - ie, better public services, a more educated workforce, more business friendly environment, etc. As it is right now, very few countries justify their tax rates and that prompts people and businesses to do the rational thing and go where they pay less for the same thing. I think it's very concerning t…

A country does not have to justify its tax rates before Facebook. A country should focus on serving its citizens, not multinationals.

It most certainly does - both to its citizens and the companies that do business there. Otherwise, the implicit idea that your taxes pay for public services is chucked out of the window and we're left with taxation as just another expense to be avoided if possible.

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

#265

Post by iguy » Mon, Mar 04, 2019, 7:39 AM UTC

BartBoch wrote: post #228

iguy wrote: post #153

Earlier quoted context omitted.

That's interesting. Are there large companies who would pay this 1.5%, who do not at present pay much Polish VAT? Or employ many people? Otherwise, why not tweak existing large taxes? You could do it on the employer's social security contribution (i.e. the part paid before not after the nominal salary) to make it sound better.

Companies like Google, Facebook etc. don't pay taxes in Poland by claiming expenses in Ireland/Holland. Thus they are "at loss" in Poland. The revenue tax would allow no tax avoidance due to that.

I understand but disagree about the tax on profits, see https://news.ycombinator.com/item?id=19295683

But my question about what Google et. al. actually do in Poland. Is it a sales office for a product made elsewhere? (Few employees, large cash flow.) An engineering office for a product sold elsewhere? (Little VAT, lots of income tax.) Etc.

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

#266

Post by scooble » Mon, Mar 04, 2019, 8:15 AM UTC

hanniabu wrote: post #258

adventured wrote: post #211

Earlier quoted context omitted.

VAT taxes are extraordinarily regressive. Next to lowering taxes on the rich, it's among the worst possible options. Increasing the income tax and taxing capital gains at regular income rates, along with bolstering estate taxes on the rich, are the ideal near-term solutions to the US budget problem. The US still has a lot of slack taxing capacity on the wealthy. That should be maxed out long before we look at a VAT.

Can you expand on why you think it's regressive? > That should be maxed out long before we look at a VAT. This is relative. The US government sucks at being efficient.

Not the person you asked, but as I understand it, poor people spend a higher percentage of their income on goods and services (because they have less left over after paying for basic necessities). So a higher percentage of their income is lost on VAT than a richer person. This makes it a much less progressive taxation method than e.g. Income tax.

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

#267

Post by ecaradec » Mon, Mar 04, 2019, 9:00 AM UTC

HNBRN wrote: post #260

French guy here. I think a lot of comments miss the point of the new tax : Some US tech companies use fake transfer prices to avoid paying income taxes in France. Eg Irish facebook subsidary owns the Facebook brand for Europe and charges other subsidiaries for using it. The French Facebook subsididary was charged so much in past years that it didnt declare any benefits in France. This is fraud. But this is fraud at E…

French guy too. I have to add that’s not specific to US company : Total, Ikea, and even EDF (french electricity state owned company ) also use the same practices. I too would prefer that they fix the law. It has been decades we know this and nothing seems to be done. I hope that the fact that population is getting more and more upset by the situation will push the politics to move. Btw the way the same companies dont seem to pay taxes in the US either.

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

#268

Post by NicoJuicy » Mon, Mar 04, 2019, 9:11 AM UTC

sbacic wrote: post #262

NicoJuicy wrote: post #242

Earlier quoted context omitted.

You are pretty wrong. Taxes aren't about limiting market access, tariffs are. Taxes are ways to keep the money in the country, reinvest it so it ripples back to the civilians. Tech companies are avoiding this.

What is the difference between a tax, a tariff and a fine?

A fine = following the rules & earning money.

Ps. I hope your being sarcastic

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

#269

Post by anoncake » Mon, Mar 04, 2019, 9:12 AM UTC

sbacic wrote: post #264

anoncake wrote: post #229

Earlier quoted context omitted.

A country does not have to justify its tax rates before Facebook. A country should focus on serving its citizens, not multinationals.

It most certainly does - both to its citizens and the companies that do business there. Otherwise, the implicit idea that your taxes pay for public services is chucked out of the window and we're left with taxation as just another expense to be avoided if possible.

Only to its citizens. Not to companies. The idea behind taxes is not to pay for public services, but for whatever the citizens want to use them for (which happens to include public services of course).

Companies aren't allowed to vote for a reason.

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

#270

Post by sbacic » Mon, Mar 04, 2019, 9:32 AM UTC

NicoJuicy wrote: post #268

sbacic wrote: post #262

Earlier quoted context omitted.

What is the difference between a tax, a tariff and a fine?

A fine = following the rules & earning money. Ps. I hope your being sarcastic

I was not being sarcastic - the question was purely rhetorical. From the company's perspective - there is no difference because they all result in the same thing - transfer of money from the company to the government.