This tax is on sales and not profits, so won't it just become another line on the bill for French consumers? I imagine they'll just break it separately from VAT.
Retroactively they'll have to eat the cost though.
France has approved a digital services tax despite threats of retaliation by US
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Re: France has approved a digital services tax despite threats of retaliation by US
#112Earlier quoted context omitted.
Who said it was only targeting US companies? 26 companies fall under the required threshold. Not all of them are US based and there's even a French one (criteo). Here is the full list [1]: • Sales of goods: Alibaba, Amazon, Apple, Ebay, Google, Groupon, Rakuten, Schibsted, Wish, Zalando. • Services: Amadeus, Axel Springer, Booking, Expedia, Match.com, Randstad, Recruit, Sabre, Travelport Worldwide, Tripadvisor, Uber.…
Most of those are still American businesses (twenty of twenty-nine, or over two-thirds). Another interesting way to look at it would be by revenue breakdown - I suspect the total revenue of American companies may be disproportionately high.
Well, let’s compare tax rates the foreign companies pay with the local French companies. Something tells me that the American companies are making out like bandits compared to the French ones that have to pay all local taxes. I see this as as an attempt to equalize the competitive playing field.
This is just another example of Americans (and hey, I’m American) feeling they are permitted to do whatever they want, even outside of their own borders. It’s peak arrogance.
Re: France has approved a digital services tax despite threats of retaliation by US
#113The US has long been using their legal system to skew free market rules and favour their domestic markets and companies.
DoJ is constantly "exporting" US law around the world by methods that border blackmail or even sometimes taking hostages.
Fighting back has been long due. Though of course France should begin with EU free-riders, Luxembourg and Ireland...
Re: France has approved a digital services tax despite threats of retaliation by US
#114I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…
>I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. There's nothing arbitrary here, in fact they're attempting to partially address a perverse incentive to take all your business online and do some jurisdiction arbitrage to minimize corporate taxes. This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris tha…
Who says we even need brick and mortar anything?
Why would the government artificially support that way of delivering goods and services?
Re: France has approved a digital services tax despite threats of retaliation by US
#115This is a stupid move. The tax is not payed by big tech giants. Not by both, either. It's complicated and depends on who needs whom the more. If there are no alternative to AWS, Google Adsense, or an American SaaS in France; the French people will be paying all of the tax. The big tech giants will just slap them with a 3% surcharge for being in France. This is different from US-China tariffs. If the US can source fro…
> If you are a French startup
… you won't get taxed under this law until you get more than 750M€ of revenue. So, all thing being equal, a French startup would be more competitive (of course things aren't equals, but that's another matter).
Re: France has approved a digital services tax despite threats of retaliation by US
#116Earlier quoted context omitted.
Most of those are still American businesses (twenty of twenty-nine, or over two-thirds). Another interesting way to look at it would be by revenue breakdown - I suspect the total revenue of American companies may be disproportionately high.
Yeah right, who'd even notice Alibaba? FYI, Alibaba's revenue (~56B) exceeds that of Ebay (~10B), Uber (~11B), Expedia (~11b), Twitter (~3b), Groupon (~3v) and Tripadvisor (~2b) combined . Yes, Amazon/Apple/Microsoft/Google/Verizon are still huge. But it doesn't mean there aren't other big fish out there.
But what’s Alibaba’s revenue from France? I suspect the proportion is quite low compared to American companies.
Re: France has approved a digital services tax despite threats of retaliation by US
#117I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…
The actual principle behind taxation is that we siphon some money off to pay for the common needs because the free market is great at allocating the correct number of shoe stores to a town and worthless at making it possible to live in that town.
Taking from foreigners so long as it isn't so much that they are discouraged from doing business is a plus in that it increases the welfare of your people at the expense of the other guys people.
This is the actual theory of taxation and everything else is after the fact justification.
Re: France has approved a digital services tax despite threats of retaliation by US
#118Aren't they already taxed in Ireland, another EU country? Isn't this double taxation?
Re: France has approved a digital services tax despite threats of retaliation by US
#119What happened to a company who has no physical presence in France refuse to pay the tax on the ground that France has no jurisdiction upon them?
Ordering French ISPs to block the web service of that company thereby breaking the fundamental human right of freedom of speech and no censorship.
Re: France has approved a digital services tax despite threats of retaliation by US
#120I think the Brexit negotiations have probably shown Europe the power of sticking together, and presumably France feels that the rest of the EU has its back here.
No, EU isn't backing this, because in that case it would have been an EU-wide tax, not in just in one country. The EU tried to establish an equivalent tax, but there was pushback from countries that are taking advantage of it (Ireland, Luxembourg)
Edit: From the French newspaper Le Monde [1], it was Ireland, Sweden, Danemark and Finland which opposed the idea. And from this article [2], Germany didn't help a lot, fearing tariff on their car industry.
[1]https://www.lemonde.fr/economie/article/2019/07/11/le-parlem...
[2]https://www.lemonde.fr/idees/article/2018/12/06/taxe-gafa-un...