EU really needs to get into a fiscal and political union like India or the US instead of their current mish mash. That will take care of both tax gaming like this and stuff like refusal to take haircut on bad Greece debt to prop up the balance sheets of German and French banks.
France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
111–120 of 195 posts
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#112> 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.
Who do you think helps create laws that have loopholes, and then heavily lobbies to maintain them.
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#113This 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…
If this system is enacted, will the benefits of staying in the EU out weigh just moving all the shell companies to the Caymans or wherever? I wish countries would give up on corporate taxes. They are either easily circumvented, or you need a massive regulatory body to analyze all corporate transactions and determine if they are "fair." All the same tax revenue can be gained through much better systems that are not tr…
You generally can't operate a running business in EU or any other country out of the Caymans. You could have share holding companies registered there but to actually run a physical business, you have to actually have a company registered in the market (or come in as a purely imported product)
Ireland works simply because it is a member of the EU and any EU HQ business can operate anywhere else in EU.
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#114This 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…
It depends how you define profit, and to me this is absolutely about taxing revenues instead of profit.
I see profit as the 'value added' by a particular activity. At least 90% of the value created by Google, Facebook and Apple was created in California. Therefore the vast majority of worldwide income generated by these companies should be subject to the tax rates that apply in California - not Ireland, not Germany, not Spain. So Google, etc should be paying more tax - but they should be paying it to the US government, not the EU. If there is ever an EU Silicon Valley then the EU can tax the worldwide profit of those EU companies.
Personally I would like to see a rule that intellectual property is fixed to the place where it is produced and forever taxed in that jurisdiction - just like land. If you write a book or develop a new drug or software then that IP stays where it was developed.
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#115Earlier quoted context omitted.
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 th…
> The notion that these companies should only be beholden to the strictest letter of the law is nonsensical.
Right, they should be beholden to the letter when it benefits them and the spirit when it benefits them. Seriously -- you wouldn't want to live in a world where this isn't the case.
* Nobody should have a technicality in the letter result in fines and punishment when they were following the spirit in earnest.
* Similarly, nobody who takes care to follow the letter exactly should be punished even if it violates the spirit. Because otherwise people and companies have no clear way to know what is and isn't allowed.
It's only when someone is violating both the letter and the spirit that there are grounds for punishment.
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#116This 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…
Being an economic liberal, I always thought that this was one of the main advantages of the EU. Setup shop in one country and sell to the whole single market while encouraging beneficial tax competition. I do oppose special deals for specific companies though. Ireland, please stand up to the Brussels cartel!
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#117This 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…
Fun fact: There is no IKEA store in Luxembourg
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#118Earlier 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…
Being an economic liberal, I always thought that this was one of the main advantages of the EU. Setup shop in one country and sell to the whole single market while encouraging beneficial tax competition. I do oppose special deals for specific companies though. Ireland, please stand up to the Brussels cartel!
An advantage for whom? For the rich? Sure. For all other people? No.
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#119Earlier quoted context omitted.
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.
Sure, but by this reasoning every website on the internet should be recieving a bill from the French government.
And Netflix should be getting a bill from Verizon when their traffic goes though their network.
Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues
#120Earlier quoted context omitted.
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.
As I understand it, there is also some monkey business related to patents. Something like this: Apple sells its patents to Apple Ireland for a dollar. Then they pay "royalties" to Apple Ireland everytime they sell an iPhone. I can't confirm where I read this.