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France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

reuters.com

101–110 of 195 posts

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#101
post #45

Earlier quoted context omitted.

Not sure I understand the question. Isn't that "most of it"? I use a road to get to work. My work pay my salary. My salary pays amazon for crap delivered to my house. The package comes delivered on the same road. The internet connection I used to visit amazons page is delivered via fiber to my house, funded just like other infrastructure. So the road and fiber was very important for my society being a developed high-…

All of those things you mentioned are already paid by somebody: the customer pays for your broadband and couriers pay for roads thorough their revenue taxes and tolls. However, the topic here is the indirect benefit of being a wealthy nation where you can have customers wealthy enough to care about your products in the first place. The argument is that this is the result of something the society or the government did…

If I'm not mistaken, a lot of the fiber rollout in France at least was heavily subsidized by the government, and hence, taxes.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#103

> A French court ruled in July French court ruled that Google, now part of Alphabet Inc, was not liable to pay 1.1 billion euros ($1.3 billion) in back taxes because it had no “permanent establishment” in France and ran its operations there from Ireland. How strange. I didn't know Google were an Irish company. I see them when I connect to the internet from all over the world. It looks like Airbnb also have their EMEA…

Google does have an office in Paris, though.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#104
post #93
post #16

This is not about taxing revenues instead of profits. This is about taxing EU-wide profits in EU countries proportional to the revenues generated in that country. At the moment, many big tech companies use bookkeeping tricks to make it look like all their profit is generated in, for example, Ireland, while the revenue is generated in other EU counties. Unfortunately, Ireland has special tax rates for these companies…

This is one of the main criticism about how the EU was made: freedom for funds goods and (mostly) workers to move around in the EU zone, without tariffs or constraints but no fiscal harmonization has been done. Therefore countries with low taxes (Ireland but also Luxembourg) attract a disproportionate amount of big companies HQ. Ikea, for instance, is officially declared in Luxembourg. Why so many people in EU rejoic…

I don't know where you got that so many people in the EU rejoice at the defection of the UK. It is a sad state of affair that gets the rest if the EU sad and angry. I don't see what there is to rejoice about, although I'm sure that some will see it as a benefit in some narrow way.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#105

Earlier quoted context omitted.

I run business in Finland and pay high taxes. Friction is not the taxes. If it were, I would have moved my business to Estonia long time ago, it's just few hours away. I could do it over internet in few hours and start within days. There are different ways for countries compete as "business platforms". I'm not saying that some way is better than another, what I'm saying is that there are different strategies that can…

I think you've vastly confused cause and effect. Rich economies can afford high tax rates because they are rich, and poor economies have to compete for what businesses they can get. Another obvious confounder is that richer states tend to be more urban, and urban places tend to be more liberal. Which vote for higher tax rates and social programs. Rural states are more conservative which favor smaller governments. Thi…

Many rich economies started poor.

Systematic investment to education and infrastructure have provided the tools to become a rich economy. Becoming rich country with low level taxation is possible only for countries with lots of natural resources, like oil.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#106
post #80
post #66

Earlier quoted context omitted.

Can you explain what are these tricks? Asking for a friend. A link is fine too.

Basic trick: - Apple France is actually just a distributor for Apple Ireland - Apple Ireland sells Apple France an iPhone at MSRP - Apple France makes basically no profit because it sells "at cost" - Apple Ireland books a profit for an iPhone sold in France

That sounds way too easy... Is there any extra sleight of hand required? I'm surprised they can get a way with such blatant maneuvers.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#107
post #104
post #93

Earlier quoted context omitted.

This is one of the main criticism about how the EU was made: freedom for funds goods and (mostly) workers to move around in the EU zone, without tariffs or constraints but no fiscal harmonization has been done. Therefore countries with low taxes (Ireland but also Luxembourg) attract a disproportionate amount of big companies HQ. Ikea, for instance, is officially declared in Luxembourg. Why so many people in EU rejoic…

I don't know where you got that so many people in the EU rejoice at the defection of the UK. It is a sad state of affair that gets the rest if the EU sad and angry. I don't see what there is to rejoice about, although I'm sure that some will see it as a benefit in some narrow way.

Rejoice is indeed a bit strong, but definitely at least Schadenfreude for the foot-bullet aimed at their trust & reputation centered industries.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#108
post #104
post #93

Earlier quoted context omitted.

This is one of the main criticism about how the EU was made: freedom for funds goods and (mostly) workers to move around in the EU zone, without tariffs or constraints but no fiscal harmonization has been done. Therefore countries with low taxes (Ireland but also Luxembourg) attract a disproportionate amount of big companies HQ. Ikea, for instance, is officially declared in Luxembourg. Why so many people in EU rejoic…

I don't know where you got that so many people in the EU rejoice at the defection of the UK. It is a sad state of affair that gets the rest if the EU sad and angry. I don't see what there is to rejoice about, although I'm sure that some will see it as a benefit in some narrow way.

That's the general sentiment in France. Too often UK has used their veto to prevent some EU-wide change or to block any initiative that was not about purely trade. Most of the people who follow EU politics think that Brexit is an economical loss but a political gain.

Here is for example an opinion piece by Michel Rocard, a former French PM (left-wing guy, really not a nationalist), before the Brexit: https://www.reddit.com/r/europe/comments/27e68h/what_rocard_...

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#109
post #81

Earlier quoted context omitted.

The federal corporate tax can be up to 35%, which is the highest in the world outside of some literally banana republics. Delaware has a corporate tax rate of 8.7%, California has 8.84. So yes no one is incorporating in Delaware becuase of taxes, WA, TX, NV and a few others have zero corporate tax.

Isn't this a misrepresentation of the global state? I think the corporate tax rate in France is 33% of profits, which isn't far from 35% Not sure how state tax rates interact with the federal one though

Keep in mind we're the last effectively communist country in the world, I'm not surprised in the least to see corporate taxes up there with the "banana republics" gp was talking about. "Social" money has to come from somewhere!

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#110
post #39

> A French court ruled in July French court ruled that Google, now part of Alphabet Inc, was not liable to pay 1.1 billion euros ($1.3 billion) in back taxes because it had no “permanent establishment” in France and ran its operations there from Ireland. How strange. I didn't know Google were an Irish company. I see them when I connect to the internet from all over the world. It looks like Airbnb also have their EMEA…

That's illegal for a person to do, but legal for these big companies. Don't blame the companies for exploiting loopholes. Blame the law. Fix the law.

No, the intent of the law is absolutely unmistakeable especially in tax-related domains. Bad-faith actors don't deserve the statutory crevices through which they divert their accounting. Fix the moral compass of their boards and officers or assign them a post-facto "we really don't like what you did there" penalty. Could be a fine, business restriction or mandatory supervision by the public authorities.

The notion that these companies should only be beholden to the strictest letter of the law is nonsensical.

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