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

reuters.com

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

#121

Post by zdkl »

Spivak wrote: post #115
zdkl wrote: post #110

Earlier quoted context omitted.

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.…

Yes that argument makes sense for rational actors, but I believe some privte organisations are simply too well adapted to the sane model for it to be effectively usable to mitigate their bad actions.

I'd argue corporations specifically could do with some more fear of the stick, in the cases where they fall in a grey area.

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

#122

Post by Spivak »

pjc50 wrote: post #18
microcolonel wrote: post #7

Earlier quoted context omitted.

No, their courts are guided by treaty to expose citizens to action on the patents of other countries, just as courts in other countries are guided by those same treaties to expose theirs. As far as I understand, all treaties of this sort are bilateral.

But those courts are still infrastructure, no?

So if you operate a business in any country that has a treaty with France you should get a bill from the French government?

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

#123

Post by rtpg »

dwaltrip wrote: post #106
rtpg wrote: post #80

Earlier 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.

My understanding is this structure is also possible in a "legitimate" setting

For example if Apple France is really just a distributor, and they buy their products at low margins, then it is what it is

I think a lot of tax agencies simply don't have the muscle to push forward on this

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

#124

Post by Spivak »

frostburg wrote: post #32
microcolonel wrote: post #2

The idea of a revenue tax of course contradicts the stated justifications for existing taxes on business: the funding of ephemeral services which contribute indirectly to the business's revenue. Google benefits from approximately no government infrastructure in France, Germany, Italy, or Spain, but they want to get their grubby hands on it nonetheless.

Who do you think paid for the bulk of the infrastructure that makes internet access work in these countries? You're talking like a parody libertarian.

So what I'm hearing is that if you operate a website that is accessible to any person in France you should get a bill from the French government since you benefited from their infrastructure.

And Netflix should probably be getting billed from Verizon, Comcast, AT&T, L3, WOW, etc. too since they can only access their customers through their infrastructure.

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

#125

Post by Spivak »

pmontra wrote: post #48
microcolonel wrote: post #24

Earlier quoted context omitted.

Which infrastructure? What infrastructure in France, Germany, Italy, or Spain, which is used by Google to reach their customers, is built and/or maintained by the governments of those countries?

For example schools, hospitals, roads. They are mostly public in maybe every single European state. Without them there are no literate healthy customers and no deliveries.

Got it, so if a French person is on vacation in the US the businesses they frequent should also pay French taxes since that person is apparently only able to exist by the grace of the French government.

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

#126

Post by Spivak »

Atropos wrote: post #40
microcolonel wrote: post #24

Earlier quoted context omitted.

Which infrastructure? What infrastructure in France, Germany, Italy, or Spain, which is used by Google to reach their customers, is built and/or maintained by the governments of those countries?

The legal system and independent courts etc are an infrastructure it depends on - Google had to leave China due to problems with the local legal system

Right, and every US business benefits from the treaties that protects their IP overseas. Should they be getting billed from the French government too?

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

#127

Post by Spivak »

_up wrote: post #74

They always talk about taxing giants, but in the end we get market entry barriers for the small startups.

There are tons of laws and regulations that only affect companies above a certain size. Are these not satisfying?

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

#128

Post by henrikschroder »

halad wrote: post #116
Iv wrote: 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…

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!

The problem is that it gives large multinational companies a strong competitive edge over single-national companies, and it makes tax money bleed from high-tax countries to low-tax countries. Both of these things are also self-reinforcing, accelerating the process.

(Not that I have any solutions to these problems, I'm just pointing them out. :) )

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

#129

Post by llukas »

Spivak wrote: post #122
pjc50 wrote: post #18

Earlier quoted context omitted.

But those courts are still infrastructure, no?

So if you operate a business in any country that has a treaty with France you should get a bill from the French government?

If you offer services in France and accept payments from French citizens then you're pretty much operating in France.

If not someone should figure out how to put a server on a satellite so they could claim no taxes are due as transaction is extraterrestrial.

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

#130

Post by seanmcdirmid »

charlesdm wrote: post #78
csomar wrote: post #72

Earlier quoted context omitted.

How does this apply to other countries? Aren't you supposed to get residence in some country before losing the residence connection of your original country? That being said, there are countries with loose taxation like Thailand where you can establish residence and avoid taxes as long as you are not operating in the country itself.

Not really, but it's better to have official residency somewhere, though. Some countries are quite flexible on residency, however. Cyprus offers residency after spending 60 days per year in the country, and exempts foreign income from tax. In Malta you can get residency by paying €20k a year (no requirement to spend any time in the country), and foreign income is also exempt from tax, etc. > That being said, there ar…

No countries tax foreign income but the USA and Eritrea.
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