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

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

#211

Post by prepend »

tim333 wrote: post #93
seibelj wrote: post #82

IMO the corporate tax rate should be zero, and then everyone would be on the same playing field. Right now the only companies that pay taxes are small ones without the resources and staff to get around it. With 0% corporate tax, all of these games and shenanigans would end. Also, corporate profits are double-taxed anyway, as taxes are paid once on profits then again as dividends / capital gains by the shareholders. T…

Zero corporate tax would lead to a lot of avoidance and drops in government revenue. Say you are a consultant earning 100k a year who owns a house. You could just pay the 100k to your company and borrow against the house for living costs and pay zero tax for the time being.

As an employee, you would pay taxes on the benefit of getting a free house from your company.

How will you pay back the loan without income? Company you will pay you income that is taxed.

Eventually the company sells the house and pays taxes.

It might defer taxes, but won’t avoid them.

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

#212

Post by ericmay »

bb123 wrote: post #201
thu2111 wrote: post #196

Earlier quoted context omitted.

normal UK businesses have to pay more like 30% of their income in tax UK corporation tax rate is 19%. USA corporation tax rate is 21%. Pushed down partly due to low tax competition from the rest of the world, i.e. places like the UK. Facebook pay little corporation tax in the UK because it isn't a British company. It's an American company. It was created in America. Most of its employees are there. Its headquarters a…

I'm sorry if this is a misunderstanding but I thought you pay tax where you do business. So Facebook should be tax on profits generated in the UK - but they play with their corporate structures to make it look like they aren't actually doing any trade here.

A couple of points:

1) If you pay tax where you do business do you pay tax on global profits there? For example, France’s new law taxes 3% of global revenue if you do more than €28m in business in the country. Should it be taxed on 3% of global revenue or on the exact amount of business it does in France?

2) If BMW sells a car in the US, do we tax BMW global for doing business in the US at the 21% tax rate?

“ The levy designed by Spain included a tax rate of 3%, which would be applied to certain digital services from tech giants whose global revenues exceed €750 million and whose earnings in Spain are greater than €3 million.”

So let’s say the US goes back to Europe and says ok Europe, all of your best industries/companies face a 3% tax if you do more than a million dollars worth of business. How would those companies react? Think they might press their governments to do something about it?

I’m not a fan of tax-avoidance or anything, but I hardly think this proposed solution is fair, or won’t elicit a significant response from the US. It’s protectionism - so call it that and make sure you are railing against the internet about it like you do when Trump does random tariffs.

Spain doesn’t export a lot to the US maybe? Ok then the US can just pick and choose Eurozone members to arbitrarily tax. That’s what I’d do. 15% tax on global revenue for European cars sold in the US. Why not?

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

#213

Post by stevehawk »

oblio wrote: post #193
stevehawk wrote: post #157

Earlier quoted context omitted.

> The USA behaves like Russia and China, they spy on foreigners, influence their elections, start unjustified wars for oil and generally have a very low regard for freedom and liberty outside of their soil. I'm sorry, but which of those do European nations not engage in as well?

Almost any European country that's not France, the UK or Russia.

I'd like to encourage you to look into some history books and current newspapers.

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

#214

Post by tzs »

krzyk wrote: post #59
nwellnhof wrote: post #54

Historically, it has always been understood that companies only pay income tax in their country of residence. BMW isn't taxed on its US income by the US, just like Google isn't taxed on its German income by Germany. I think it's more accurate to say that the so-called "Google tax" is actually a tariff on Internet services. Traditionally, tariffs were only levied on imported goods but the concept works for services as…

It depends what you mean by "understood". For me it is obvious that BMW should pay taxes in US for cars sold in US. Are they taxfree there? And Google should pay tax in country where they sell given good - assuming a tax can be goods based.

> For me it is obvious that BMW should pay taxes in US for cars sold in US. Are they taxfree there?

He was talking specifically about income tax, not other taxes such as sales taxes or import taxes.

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

#215

Post by sbacic »

pjc50 wrote: post #198
sbacic wrote: post #185

Earlier quoted context omitted.

> GAARs ultimately boil down to the question of "did you do this rather than a more obvious transaction structure simply to pay less tax", a sort of Occam's razor. Okay, so it is a "just trust us" system of deciding who is breaking the law and who isn't. In that case, I'll gladly take multinationals not paying taxes over some government official arbitrarily deciding that I am avoiding taxes and should be punished. Ev…

It is not arbitrary. If you're in a corrupt system, you're vulnerable even if you have followed the rules. GAAR systems generally have a set of best practices, and if you disagree with the result you have access to the court system ( not "a government official") to work it out.

> ...if you disagree with the result you have access to the court system (not "a government official") to work it out.

You also have access to the court in case of actual tax evasion, though I assume the odds would not exactly be in your favor.

My whole point is that you're better off avoiding the whole ordeal in the first place and that having large multinationals and governments playing whack-a-mole over the tax system is an acceptable price to pay.

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

#216

Post by Mirioron »

virmundi wrote: post #208
Mirioron wrote: post #170

Earlier quoted context omitted.

The reason the EU's system is so similar is that the circumstances are similar. If you don't require unanimous approval on critical issues then why would smaller countries ever join with Germany, France, Italy, and the UK around?

If you require unanimous agreement how can you ever prevent a bad actor from taking advantage of the system?

By persuading them. It's also much less of a problem that a small country as a bad actor takes advantage of the system compared to big countries abusing smaller ones.

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

#217

Post by oblio »

stevehawk wrote: post #213
oblio wrote: post #193

Earlier quoted context omitted.

Almost any European country that's not France, the UK or Russia.

I'd like to encourage you to look into some history books and current newspapers.

You're making quite a few assumptions, there. I'll disregard the ad hominem and wait patiently for recent examples of what you're referring to.

By recent, I'm willing to accept things in the past 30 years. Again, exclude France, the UK and Russia.

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

#218

Post by virmundi »

Mirioron wrote: post #216
virmundi wrote: post #208

Earlier quoted context omitted.

If you require unanimous agreement how can you ever prevent a bad actor from taking advantage of the system?

By persuading them. It's also much less of a problem that a small country as a bad actor takes advantage of the system compared to big countries abusing smaller ones.

Will Ireland vote against their current income?

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

#219

Post by mcv »

ensignavenger wrote: post #205
mcv wrote: post #79

Earlier quoted context omitted.

Only when the taxes reduce their profits to zero. As long as a country only taxes domestic revenue, that's unlikely to happen. And in my opinion, countries should be taxing (domestic revenue - domestic costs), rather than allowing companies to move their undeclared profits around to the nearest tax haven to dodge all taxes.

So if I setup a company to do research and development in Spain, and spend $100 billion dollars creating a breakthrough technology, then I license my breakthrough technology to Americans for $1 billion dollars per year, America should be taxing my $1 billion per year in revenue as if it were 100% profit because I don't have any expenses in America?

Yeah. You already deduct your costs in Spain from your profits there. If you don't do any business in Spain, why are you there? The idea here is to discourage corporations from putting basing in tax havens where they don't do any business. Taxes are paid where the profit is made.

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

#220

Post by antaviana »

ericmay wrote: post #212
bb123 wrote: post #201

Earlier quoted context omitted.

I'm sorry if this is a misunderstanding but I thought you pay tax where you do business. So Facebook should be tax on profits generated in the UK - but they play with their corporate structures to make it look like they aren't actually doing any trade here.

A couple of points: 1) If you pay tax where you do business do you pay tax on global profits there? For example, France’s new law taxes 3% of global revenue if you do more than €28m in business in the country. Should it be taxed on 3% of global revenue or on the exact amount of business it does in France? 2) If BMW sells a car in the US, do we tax BMW global for doing business in the US at the 21% tax rate? “ The lev…

Regarding 1), it is a 3% on France revenue, not global revenue.
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