G7: Rich nations back deal to tax multinationals • Hacker News Board

Re: G7: Rich nations back deal to tax multinationals

#181

Post by cheese_van » Sat, Jun 05, 2021, 1:44 PM UTC

nomoreplease wrote: post #41

bodono wrote: post #13

Earlier quoted context omitted.

Yes I understand that, but I believe that many corporations today pay even lower than a 15% effective tax rate. I suppose you're saying that these loopholes will be closed up to that minimum?

Depends what you mean by loop holes. In the US, you can deduct R&D or capital costs like building a factory. That can make your tax bill nearly zero. I wouldn’t call that a loop hope. It’s something out there to incentivize capital spending and job creation. Other countries have the same

Perhaps by "loop holes" we should instead say "tax law".

Re: G7: Rich nations back deal to tax multinationals

#182

Post by m12k » Sat, Jun 05, 2021, 1:45 PM UTC

viraptor wrote: post #156

H12 wrote: post #136

Earlier quoted context omitted.

Thank you for your reply. In hindsight it makes a ton of sense that this would only apply to companies with a physical presence in multiple countries. Tracking country of origin for every online purchase and grouping them in order to pay international taxes would be an absolutely ludicrous requirement. No matter how low your opinion of the G7 is, they're not that dumb.

Doesn't this already apply though? I don't know the details here, but Steam seems to apply both state- and country-specific taxes at checkout. Steam is not a multinational corporation as far as I know.

A lot of countries have laws requiring companies that sell more than $X annually to their citizens to register as a foreign company and apply local VAT.

Re: G7: Rich nations back deal to tax multinationals

#183

Post by Silhouette » Sat, Jun 05, 2021, 1:45 PM UTC

DizzyDoo wrote: post #88

trinovantes wrote: post #72

Earlier quoted context omitted.

Don't payment processors like Stripe already handle different regional taxes?

No, Stripe take their cut and the tax implications are down to the seller. However! They did recently acquire TaxJar ( https://stripe.com/newsroom/news/taxjar ) so I imagine things will become easier in this regard, reporting and filing, soon.

That's an interesting bit of news, in that at least it confirms Stripe have recognised the danger. I will be happy to be proven wrong about this, but I fear their reaction is too little and too late for merchants here in the UK. The likes of Paddle are already offering much simpler tax arrangements and other significant advantages as well, and as you would expect, this is already disrupting some markets that might have been considered Stripe's natural territory just a few years ago.

Re: G7: Rich nations back deal to tax multinationals

#184

Post by walshemj » Sat, Jun 05, 2021, 1:46 PM UTC

orf wrote: post #2

Summary: > Firstly, the G7 want a global minimum tax rate so as to avoid a "race to the bottom" where countries can undercut each other with low tax rates. > Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits. Good. It’s a shame that Biden had to back down from the initial 28% because of do…

nah Biden wanted other countries to raise the rate but wasn't going to address US companies moving revenue from country a to country b.

Re: G7: Rich nations back deal to tax multinationals

#185

Post by Pelam » Sat, Jun 05, 2021, 1:46 PM UTC

odiroot wrote: post #65

Can someone rain on my parade and explain how is it not going to work?

Seems that most comments here are negative on the prospects of this. Almost as if they want things like this to fail, but of course it can also be seen as valid and informed critical thinking.

Regardless, in my book this is at least a mildly positive bit of news even if the road to implementation will be long and difficult.

Obviously, while no law can be enforced to 100% or be free of loop holes that is not a strong argument to be dismissive of the rule of law, international treaties or democratic or other political processes.

Re: G7: Rich nations back deal to tax multinationals

#186

Post by WanderPanda » Sat, Jun 05, 2021, 1:46 PM UTC

refurb wrote: post #35

orf wrote: post #2

Summary: > Firstly, the G7 want a global minimum tax rate so as to avoid a "race to the bottom" where countries can undercut each other with low tax rates. > Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits. Good. It’s a shame that Biden had to back down from the initial 28% because of do…

This is a terrible idea. This “race to the bottom” is what drives efficiency and better ways of doing things. It’s why we don’t have $10,000 desktops in our homes with 386 processors. If computer chip manufacturers decided to create a floor price for their products that would be collusion and bad for consumers. Same here. It’s bad for citizens of a country. You damn know some developing country is going to be told “n…

If it would be only for the complex tax evasion schemes I would be on their boat but in the end it will reduce competition between countries which is just dystopic.

Re: G7: Rich nations back deal to tax multinationals

#187

Post by op03 » Sat, Jun 05, 2021, 1:48 PM UTC

swiley wrote: post #174

rjknight wrote: post #162

I do wonder if we wouldn't be better off eliminating corporation tax entirely. The revenue of a corporation can, roughly, be: 1. Spent on goods or services from another company (including freelancers, contractors, etc.) 2. Spent on rent 3. Spent on capital purchases 4. Spent on wages 5. Spent on debt repayment or other forms of financing 6. Paid out in dividends 7. Spent on share buybacks 8. Invested in something els…

9. Just kept in a large pile like Apple does.

More like a large mountain range.

Re: G7: Rich nations back deal to tax multinationals

#188

Post by addicted » Sat, Jun 05, 2021, 1:48 PM UTC

amelius wrote: post #159

Naga wrote: post #15

Earlier quoted context omitted.

It's complicated. "Money they made in their country" is hard to define. Large companies abuse intangible assets to shift profits around, but it's hard to say at what point abuse starts. For example, Google USA sells advertising to its clients. But, the assets it is selling are actually owned by Google Ireland. Google Ireland charges Google USA a license fee of 100% of the revenue they made. Suddenly, Google USA has n…

> Probably the best solution is a minimum tax worldwide. Wouldn't that make companies pay taxes in countries they are based in (as opposed to where they make money)? Anyway this could be the push that the EU needed to start their own Silicon Valley.

If there is no benefit to moving around the income earned, companies would stick to declaring their income at the point of earning (so where they provided the services) because that would likely be the easiest, and would eliminate all sorts of currency based risks, transaction costs, etc.

Re: G7: Rich nations back deal to tax multinationals

#189

Post by ed25519FUUU » Sat, Jun 05, 2021, 1:48 PM UTC

csomar wrote: post #89

throwaway13337 wrote: post #44

This sounds like it will be hell for small software companies with customers all over the world. Paying taxes differently for each country of the customer you sell to is a ridiculous hardship. It only benefits the large multinationals to reduce their competition. These sorts of rules centralize markets to fewer and fewer companies able to spend the resources to fulfill more and more complex rules. The end result is h…

> This sounds like it will be hell for small software companies with customers all over the world. Uh, no, this will bring required tax profits for rich governments from these predatory countries that will finally fix their budget deficits and insure equality between its citizens. /just kidding, this will break small companies and make it almost impossible to sell/export to richer countries for small new comers. The…

Interesting narrative here. Ireland is “predatory” because they create an extremely low tax environment for competitiveness.

Is Texas also predatory for having no income tax versus CA, NY etc 10%+ income tax?

Re: G7: Rich nations back deal to tax multinationals

#190

Post by nickpp » Sat, Jun 05, 2021, 1:49 PM UTC

avianlyric wrote: post #144

nickpp wrote: post #116

Earlier quoted context omitted.

There are 3 ways to vote in a corporation: - with your wallet: buy or not buy from them - with your broker: invest (and then literally vote from the inside) or not in them - with your feet: work or not for them Corporate interests are directly aligned with us exactly because without these votes they are finished. That is why corporates try to create products clients want, profit investors want and salaries workers wa…

This is such crap. While in theory you’re right, it ignores the biggest difference. With politicians ever person only gets one vote, theoretically equal power to force change. With corporations, the number of votes a person gets is directly related to their bank balance. There’s no such thing as equal power for the people, only the rich get to vote.

That is exactly how we got the planet to its current state: if you give more power to the numbers you'll encourage more numbers. Maybe it's time to give more weight to another human accomplishment than reproduction, like to the value created.

But I don't hear governments giving more voting rights to more populous countries, instead it's to the "more developed" (PIB) and "more powerful" (military) both proxies for wealth.