Spain planning on going ahead with ‘Google tax’ despite US tariff threats • Hacker News Board

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#41

Post by balfirevic » Thu, Dec 05, 2019, 1:51 PM UTC

nabla9 wrote: post #39

jeltz wrote: post #24

Earlier quoted context omitted.

That has already happened to some degree, we just need to expand it and simplify it. Within the EU you have to pay the VAT of the country of the buyer for "digital services". But shouldn't Google and Amazon already be subject to that since they have EU subsidiaries?

Their local EU subsidiaries are just for expenses and business. These companies show their profits in places like Bermuda (British Overseas Territory) Ireland, or Luxembourg and use all kinds of schemes and special arrangements to reduce them.

The parent poster was talking about VAT, which has nothing to do with profits or where the profits are shown.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#42

Post by the-dude » Thu, Dec 05, 2019, 1:53 PM UTC

bluecalm wrote: post #38

jeltz wrote: post #24

Earlier quoted context omitted.

That has already happened to some degree, we just need to expand it and simplify it. Within the EU you have to pay the VAT of the country of the buyer for "digital services". But shouldn't Google and Amazon already be subject to that since they have EU subsidiaries?

You have to pay the VAT when you sell to EU even if you don't have presence in EU. Google pays that. The fuss is about some countries wanting more than that.

The customer pays the VAT. Google collects it and returns it to the government.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#43

Post by mc32 » Thu, Dec 05, 2019, 1:53 PM UTC

vector_rotcev wrote: post #32

As a non-economist (amateur or professional), I get the impression that countries are losing their concern of the repercussions of displeasing the USA economically. Is this an accurate interpretation? If so, is it that they're less fearful of reprisals (tariffs?) or that they're less confident in the benefits of cooperation with the USA? Or a mix? Or something else?

I think it’s more like they’re trying to catch up with the internet. Kind of like in the US states are finally able to get Amazon to tax sales on their behalf —previously people had to self report; and the reporting rate was very very low...

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#44

Post by pmontra » Thu, Dec 05, 2019, 1:54 PM UTC

vector_rotcev wrote: post #32

As a non-economist (amateur or professional), I get the impression that countries are losing their concern of the repercussions of displeasing the USA economically. Is this an accurate interpretation? If so, is it that they're less fearful of reprisals (tariffs?) or that they're less confident in the benefits of cooperation with the USA? Or a mix? Or something else?

The USA are entering an isolationist phase (it started with Obama, acccelerated by Trump) so it's natural that the rest of world is a little bit less concerned about their threats.

Unfortunately the new possible friends look less friendly than the USA of the second half of '900.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#45

Post by refurb » Thu, Dec 05, 2019, 1:54 PM UTC

vector_rotcev wrote: post #32

As a non-economist (amateur or professional), I get the impression that countries are losing their concern of the repercussions of displeasing the USA economically. Is this an accurate interpretation? If so, is it that they're less fearful of reprisals (tariffs?) or that they're less confident in the benefits of cooperation with the USA? Or a mix? Or something else?

Not sure things have really changed. The US and EU countries have historically had disagreements and went their own ways.

At least in terms of major repercussions, threats do happen, but it seems like compromises are the end result, usually done quietly with little press (e.g. the recent Canadian free trade agreement).

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#46

Post by asdfasgasdgasdg » Thu, Dec 05, 2019, 1:54 PM UTC

mrep wrote: post #40

asdfasgasdgasdg wrote: post #35

850M euro, the proposed amount to be raised, would be on the order of 1% of Google's worldwide revenues. Google doesn't break down its revenues by country but it's hard to imagine it derives more than about 1/20 of the revenues from Spain. If we assume 1/20, which seems very generous to Spain, the amount to be raised amounts to about 20% of revenues in Spain. So, this seems very high to me? Is this amount annual, or…

The tax will effect more than Google like Facebook and Amazon. The 850M number accounts for the tax revenues from all companies.

Ah, great point. I was misled by the title, although now I recall that it did discuss Amazon as well.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#47

Post by cf141q5325 » Thu, Dec 05, 2019, 1:55 PM UTC

LatteLazy wrote: post #3

nabla9 wrote: post #2

These are patchwork solutions. It would make more sense if EU countries would make laws that extend normal VAT to all internet business in EU and close all Irish loopholes. Google and others use Irish tax arrangement schemes like "The Double Irish" (base erosion and profit shifting), the Single Malt, and CAIA to avoid paying taxes. 12 EU states reject move to expose companies' tax avoidance https://www.theguardian.co…

While I agree about it making more sense that way, you only need one state to veto such a measure, and further integration is on hold right now. Plus the EU has it's hands full with Syria, Russia\Ukraine and Brexit. So Spain can act now, or wait a few more decades...

I wouldnt say Syria and Ukraine are anything the EU has their hands full over.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#48

Post by idontknowbout » Thu, Dec 05, 2019, 1:55 PM UTC

lucb1e wrote: post #37

rat9988 wrote: post #13

Earlier quoted context omitted.

The us is protecting its own interests. It doesn't care about right or wrong, nor does any other country. Wether the current action is morally right, and wether countries should behave outside the boundaries of ethics is an exercise left to the reader.

If that is true, why do countries spend money on development aid? Isn't that caring about what's right? Or to take a more extreme example, why do we give a lifelong salary for nothing in return to people who are unable to work for the rest of their lives? Surely killing them would be more efficient. I do think states should, can, and do care about right and wrong to a certain extent. That's the difference between us…

> If that is true, why do countries spend money on development aid? Isn't that caring about what's right?

Maybe to recruit most of the people who can question the exploitation of these places? like in Africa?

Why are there little aid to helping to develop economic corridors/systems but billions to treat diseases are mostly side effects of poverty that won't be issues if said places are not so poor

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#49

Post by pc86 » Thu, Dec 05, 2019, 1:56 PM UTC

_Understated_ wrote: post #34

pc86 wrote: post #25

Earlier quoted context omitted.

There's no such thing as a tax loophole. It's the law, and is written specifically the way it is for a reason. "Loophole" by definition implies that it's a mistake, and with the amount of money at stake that's incredibly unlikely.

I upvoted your comment but I respectfully disagree: If a country has a law that says "you pay X tax using this law/method but Y tax using this other law/method" Google are perfectly within their rights to say, "Let's use Y". Who in their right mind would say "you know what, I'm going to pay more tax"? Have you seen the size of modern tax laws?[1] They're utterly gargantuan! [1] https://www.theguardian.com/commentisfr…

It sounds like you agree with me. That's not a loophole. That's a conscious decision on the part of whomever wrote that section of law to basically say "pay the lesser of these two methods."

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#50

Post by corebit » Thu, Dec 05, 2019, 2:01 PM UTC

pmontra wrote: post #44

vector_rotcev wrote: post #32

As a non-economist (amateur or professional), I get the impression that countries are losing their concern of the repercussions of displeasing the USA economically. Is this an accurate interpretation? If so, is it that they're less fearful of reprisals (tariffs?) or that they're less confident in the benefits of cooperation with the USA? Or a mix? Or something else?

The USA are entering an isolationist phase (it started with Obama, acccelerated by Trump) so it's natural that the rest of world is a little bit less concerned about their threats. Unfortunately the new possible friends look less friendly than the USA of the second half of '900.

Please use the right words so that no one misunderstands the truth or thinks that you are lying.

What the USA is doing is in no way isolationist. That is something completely different with no parallels or relations in any way. Using the word isolationist is misleading to the point of mistruth.

It would be more accurate and representative of reality to say the USA appears to be acting more independently on the international stage. Isolation would imply the USA is not acting on the international stage at all.