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

Re: G7: Rich nations back deal to tax multinationals

#111

Post by H12 » Sat, Jun 05, 2021, 1:08 PM UTC

mediocregopher wrote: post #100

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…

Shod google not be taxed twice in this example? Once on the income made in the USA when they sold the actual thing, and once in Ireland when the Irish branch sold the thing to the USA branch? Not to mention sales tax....

Google USA made zero profit on those sales due to the 100% licensing fee with Google Ireland, so there's no income to be taxed. Revenue and expenses are exactly equal.

As for sales tax, I don't really know how it works in this situation.

Re: G7: Rich nations back deal to tax multinationals

#112

Post by bertil » Sat, Jun 05, 2021, 1:08 PM UTC

sumedh wrote: post #29

Zenst wrote: post #18

Earlier quoted context omitted.

> Good. It’s a shame that Biden had to back down from the initial 28% because of domestic opposition. It's a compromise/balance and as we know of many taxes - easier to raise them than to get them inplace too start with. Biggest issue in all this would be that it will need the weight of those supporting it to peer-pressure the other countries to join. So Ireland, Luxenburg and other corporate tax over-friendly countr…

> So Ireland, Luxenburg and other corporate tax over-friendly countries Why cant US pass laws banning companies registered in tax haven countries to operate in the US?

Both Ireland and Luxembourg have legitimate activities: Irish whiskey isn’t a big deal compared to tech, but there’s no real reason to ban it. Defining a line is hard, especially when the country’s traditional advantage _is_ finance, like it is in Luxembourg, even outside of tax-optimisation.

It’s easier to have rules against countries with less credibility, but then again, you risk making things complicated for Seychelles, Curaçao, St-Martins. It’s easier to define a minimum tax so that they don’t have to pick between tourism and tax optimisation.

Re: G7: Rich nations back deal to tax multinationals

#113

Post by reader_mode » Sat, Jun 05, 2021, 1:08 PM UTC

mediocregopher wrote: post #100

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…

Shod google not be taxed twice in this example? Once on the income made in the USA when they sold the actual thing, and once in Ireland when the Irish branch sold the thing to the USA branch? Not to mention sales tax....

You aren't paying taxes on revenue, you pay tax on profit

Re: G7: Rich nations back deal to tax multinationals

#114

Post by throwaway4good » Sat, Jun 05, 2021, 1:09 PM UTC

dd36 wrote: post #99

tomp wrote: post #81

Earlier quoted context omitted.

Where is the money made? Take Apple selling phones in the UK. Is the money made in the UK, where the phones are sold? Maybe part of it (selling phones), but Apple enjoys a large premium over Android, and that's more debatable. Was the money made in Taiwan, where iPhones are made? Or in California, where iPhone was invented? Personally, I don't really see why UK would tax Apple more than Android makers, simply because…

It’s where they’re sold.

Maybe they should do a sales tax then.

Re: G7: Rich nations back deal to tax multinationals

#115

Post by sumedh » Sat, Jun 05, 2021, 1:09 PM UTC

gruez wrote: post #97

sumedh wrote: post #29

Earlier quoted context omitted.

> So Ireland, Luxenburg and other corporate tax over-friendly countries Why cant US pass laws banning companies registered in tax haven countries to operate in the US?

Because that would lead to a trade war?

Do you really think countries like Ireland, Liechtenstein can afford to piss of US. US has the leverage here, it should use it.

Re: G7: Rich nations back deal to tax multinationals

#116

Post by nickpp » Sat, Jun 05, 2021, 1:09 PM UTC

grey-area wrote: post #96

nickpp wrote: post #90

So the largest violence monopolists in the world are using the unique opportunity handed to them by the pandemic to create a cartel with two purposes: - raise the protection tax they levy on their subjects - prevent smaller violence monopolists from undercutting their protection fees through competition Basically governments deciding competition is not good for them and everyone should just pay up.

This is all true, but I think I marginally prefer the dominion of politicians I can vote for to the feudal structure of multinational corporations, which we have even less power over.

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 want. On top of that, social responsibility programs to keep everyone happy and pay their taxes.

There is only one way to vote when it for politicians: with your feet. And they don't care since they win by getting votes and they get votes by spending money which is taken from us. They have no interest aligned to ours.

That is why I much prefer the dominions of corporations.

Re: G7: Rich nations back deal to tax multinationals

#117

Post by CryptoPunk » Sat, Jun 05, 2021, 1:10 PM UTC

This reminds me of when the G7 political elite got together in 1990 and created FATF, to institute a financial warrantless mass-surveillance system, euphemistically called an anti-money laundering system, and nearly every government in the world soon signed up, despite it turning out to be one of the least effective policy experiments in history:

https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...

Re: G7: Rich nations back deal to tax multinationals

#118

Post by Silhouette » Sat, Jun 05, 2021, 1:10 PM UTC

trinovantes wrote: post #72

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…

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

Not really. That sort of payment processor might allow you to specify a tax rate to include on a bill and maybe to configure different rates that are automatically selected depending on where your customer is. However, typically they do not actively monitor and update the current tax rates for different areas, nor do they handle the reporting and remittance to all required authorities, so they only take care of a small part of the overall compliance requirements.

There is another type of service becoming increasingly prominent, which is a "merchant of record". In effect, the service becomes a reseller for your product or service, and since they are then the vendor for legal purposes, they also become responsible for all the end customer taxation issues. You in turn typically deal with them as a much simpler B2B relationship between just two entities.

Re: G7: Rich nations back deal to tax multinationals

#119

Post by jpadkins » Sat, Jun 05, 2021, 1:10 PM UTC

dd36 wrote: post #95

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…

It’s odd that they aren’t already paying taxes where goods are sold.

The argument is a tax on revenue is very unfair to low margin business like retail or farming, so corp. tax is usually on profits. Which creates the loophole of where are the profits recognized.

Re: G7: Rich nations back deal to tax multinationals

#120

Post by AmericanChopper » Sat, Jun 05, 2021, 1:10 PM UTC

mediocregopher wrote: post #100

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…

Shod google not be taxed twice in this example? Once on the income made in the USA when they sold the actual thing, and once in Ireland when the Irish branch sold the thing to the USA branch? Not to mention sales tax....

What you’re proposing is a tax on revenue, rather than a tax on profits. That is what a sales tax is.