EU adopts global minimum 15% tax on big business • Hacker News Board

Re: EU adopts global minimum 15% tax on big business

#121

Post by ClumsyPilot » Fri, Dec 16, 2022, 9:00 PM UTC

bee_rider wrote: post #95

redm wrote: post #70

Earlier quoted context omitted.

It's where the profits are, not where the cost centers are. If the customers are in France, the profits are in France.

What if Netflix France has to license their content and platform from Netflix US, the the license costs are coincidentally exactly the same as the revenue made in France? Then there will be no profits in France.

thats exactly the kind of accounting trick they are trick to get rid off.

The fact that it matches the revenue exactly shows that its not a real lisencing deal

Re: EU adopts global minimum 15% tax on big business

#122

Post by ClumsyPilot » Fri, Dec 16, 2022, 9:01 PM UTC

nickff wrote: post #102

mywittyname wrote: post #97

Earlier quoted context omitted.

At some point, I think governments are going to need to break down and start taxing revenue instead of profits. A 3% tax on total revenue is the same as a 15% tax on the profits of a product with 20% profit margins.

This would benefit large and established companies with stable margins, while penalizing smaller businesses and startups. I don’t think this is the intended result. It also discourages long-term investments, and further rewards short-termism (which everyone seems to dislike).

you can apply a rule only to companies with over 10 billion in revenue

Re: EU adopts global minimum 15% tax on big business

#123

Post by ClumsyPilot » Fri, Dec 16, 2022, 9:02 PM UTC

Ygor wrote: post #109

_8j50 wrote: post #96

Earlier quoted context omitted.

Because that is where the sale happened. You buy a lot of stuff that was made in China but pay tax in your country right? Not only was the sale in france, the goods that the customer pay for (video content) are delivered too france like normal goods and watched/consumed in france.

No, you pay VAT/sales tax for stuff made in China. The company pays taxes on profits where the company is registered. When you pay for Netflix in France, you pay VAT on the transaction too.

Is that why iPhone is design in US, Built in china but the taxes are paid in bermuda? Totally legitimate?

Re: EU adopts global minimum 15% tax on big business

#124

Post by mattrighetti » Fri, Dec 16, 2022, 9:03 PM UTC

hassanahmad wrote: post #7

Bigger tax for bigger business. Fair enough.

Who decides what's bigger? Those taxes are going to make almost zero changes since customers and workers are going to pay for it, same ol' story about the triangle company-worker-customer.

Re: EU adopts global minimum 15% tax on big business

#125

Post by ratg13 » Fri, Dec 16, 2022, 9:05 PM UTC

brnt wrote: post #100

Nextgrid wrote: post #34

Earlier quoted context omitted.

Out of curiosity, how do you define where profits are made when it comes to selling digital services? There is no physical movement of goods. Do you determine it based on where the software was originally written?

For VAT this is already defined (in the EU): wherever the purchaser is when they get their goods handed to them. If I drive over the border to Germany, I pay German taxes. If I buy online and have it shipped to the Netherlands, I pay Dutch taxes. A digital good is handed to me wherever I am when I purchase it, so I pay taxes in that jurisdiction.

If you sell concert tickets, would this mean that you need to book the profits in the respective countries of anyone anywhere in the world?

Re: EU adopts global minimum 15% tax on big business

#126

Post by ClumsyPilot » Fri, Dec 16, 2022, 9:08 PM UTC

79a6ed87 wrote: post #107

poszlem wrote: post #90

Earlier quoted context omitted.

Yeah, I would not even mind a "no double citizenship" rule.

Many countries don't allow for double citizenship, but sometimes they have to make exceptions because some countries don't allow you to renounce to your nationality

You can't get rid of a greek citizenship,its impossible. I think thats how it should be.

The games with revoking citizenship of Snowden, etc. ate absurd and should not be allowed. Even if the person is a criminal, he must server punishment defined in law. He is still 'your' American/greek/ whatever criminal

Re: EU adopts global minimum 15% tax on big business

#127

Post by zuminator » Fri, Dec 16, 2022, 9:08 PM UTC

djbebs wrote: post #76

zerr wrote: post #66

Why businesses are taxed so low but individuals/employees so high in EU (35%-65% income tax)?

Because businesses are owned by people who in turn are taxed. In effect any corporation tax is a double tax.

That's how taxes work generally though. I already paid income taxes on my salary, but when I spend it on something I have to pay taxes again, and then the retailer has to count it as taxable income as well. Anytime money changes hands the government gets its vig. I don't see how the corporate tax is so egregiously different.

Re: EU adopts global minimum 15% tax on big business

#128

Post by bombcar » Fri, Dec 16, 2022, 9:10 PM UTC

woodruffw wrote: post #79

leereeves wrote: post #53

Earlier quoted context omitted.

Top three percent is fairly rich. > The Revenue Act of 1913 ... established a one percent tax on income above $3,000 per year; the tax affected approximately three percent of the population. https://en.wikipedia.org/wiki/Revenue_Act_of_1913

Not in absolute terms: the fact that 97% of Americans in 1913 made less than $80,000 equivalent per year is more a testament to America (and broadly the world's) staggering poverty relative to our current wealth. Put another way: you can't tax destitute people (at least not for long, and not without losing your head), but can absolutely can tax the average American household in 2021[1]. [1]: https://www.census.gov/li…

Weren't substantial percentages of the US still on subsistence farming/bartering at the time? It's hard to income tax a society without much income.

Re: EU adopts global minimum 15% tax on big business

#129

Post by Ygor » Fri, Dec 16, 2022, 9:12 PM UTC

ClumsyPilot wrote: post #123

Ygor wrote: post #109

Earlier quoted context omitted.

No, you pay VAT/sales tax for stuff made in China. The company pays taxes on profits where the company is registered. When you pay for Netflix in France, you pay VAT on the transaction too.

Is that why iPhone is design in US, Built in china but the taxes are paid in bermuda? Totally legitimate?

I'm not arguing that the setup is legitimate. I'm pointing out that the above analogy is confusing different tax types. The sales tax is not in question here. I'm all for revisiting how profits are taxed based on where they are made, but sales taxes/VAT is already collected correctly for both iphone and netflix.

Re: EU adopts global minimum 15% tax on big business

#130

Post by r00fus » Fri, Dec 16, 2022, 9:13 PM UTC

jandrewrogers wrote: post #112

mywittyname wrote: post #97

Earlier quoted context omitted.

At some point, I think governments are going to need to break down and start taxing revenue instead of profits. A 3% tax on total revenue is the same as a 15% tax on the profits of a product with 20% profit margins.

Taxing revenue has turned out to be a terrible idea every time it has been tried. It creates perverse incentives that encourage companies to be inefficient and wasteful. One of the biggest policy problems with revenue taxes is that the effective tax rate is much higher on smaller companies than larger companies. A large vertically integrated company like Apple would pay a lower effective tax rate on an iPhone than an…

Quite the opposite. You can't fake revenue nearly as much as you can fake profits. Examples are legion - look at any company in the US that pays 0% (or negative) corporate tax rate.