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EU lost up to €5.4B in tax revenues from Google, Facebook: report

reuters.com

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Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#131

Post by Oletros »

ringtail wrote: post #125
Oletros wrote: post #105

Earlier quoted context omitted.

No, I'm asking how many multinational have left a big market (one of the biggest in the world) just for taxation.

But what do you mean by "leaving a market" ? MNCs have been doing restructring for decades for reasons ranging from regulations to taxes. If Google do leave EU, all it will do is legal maneuvering. Nothing will change for EU consumers. They can still do Google searches and buy ads. Profit will stay the same.

> But what do you mean by "leaving a market"

Pulling off any presence in that market, offices, stores, etc.

> If Google do leave EU, all it will do is legal maneuvering. Nothing will change for EU consumers. They can still do Google searches and buy ads. Profit will stay the same.

No, because there is all of the burden of a company from outside the EU doing business with EU companies. And not talking about the restriction on data protection.

And don't talk about companies like Amazon or Apple with physical goods

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#132

Post by Oletros »

dangsmum wrote: post #128
Oletros wrote: post #105

Earlier quoted context omitted.

No, I'm asking how many multinational have left a big market (one of the biggest in the world) just for taxation.

biggest ones that immediately springs to mind is C&A and pfiser in the UK. the UK and US auto industries in general, manufacturing in general. Google left the US. So did Apple. In fact, are there any multinationals left in high tax countries?

What are you talking about?

When the heck did Apple and Google left USA?

> In fact, are there any multinationals left in high tax countries?

I think you're confusing where the headquarters are located with presence in a market

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#133

Post by dangsmum »

gaius wrote: post #52
dangsmum wrote: post #33

Earlier quoted context omitted.

thats what the bitcoin detractors said, didnt work out to well for them did it? and anyway, even if you limit it to "real economy" (if anything in cyberspace can really be counted as real, which is highly suspect) it comes from ad revenue. all taxing eu ad revenue in cyberspace will do is ensure eu companies cant competitively show their ads in cyberspace, doing so will lose the eu a lot more than just "tax".

Ad spending ultimately comes from sales revenue from physical goods and services and is intended to drive those sales.

and the required tax is paid on those physical good and services. nothing to do with google or 0s and 1s.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#134

Post by anonymousDan »

lucideer wrote: post #107
anonymousDan wrote: post #71

Earlier quoted context omitted.

For what it's worth, that ruling is strongly disputed by the Irish Government and is under appeal.

True, though Ireland currently has a minority government operating under a combination of coalition and confidence and supply[0], and the ruling is broadly supported not only by opposition, but also by independent coalition members. Opposition to the EU ruling is far from a popular position within Ireland, even within government. "Strongly" is an overstatement. [0] https://en.wikipedia.org/wiki/Confidence_and_supply

It is strongly disputed by the government, I wasn't talking about the opposition. And Fianna Fail, the main opposition party, would also broadly support the government's position. There is zero chance of there being a government in the foreseeable future that would take a contrary position.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#135

Post by ringtail »

alkonaut wrote: post #114
elgenie wrote: post #109

Earlier quoted context omitted.

Taxing on revenue is simpler but utterly non-sensical. If selling a phone that cost $800 to make for $805 incurs an 80x tax liability compared to selling hammer that cost $5 to make for $10, then the modern economy of long supply chains and specialization grinds to a halt. Another way to think about it: a single year in which the tax on revenue is higher than profit would require the business to be go into debt or be…

Perhaps I was unclear: The suggestion is not to tax the revenue, but to tax based on revenue - that is: the tax would still be on $5 profit but where that tax is extracted is decided by where the company was doing business, rather than where it is incorporated.

Hmm thats effectively consumption tax of very significant rate (eg 33%).

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#136

Post by anonymousDan »

endless1234 wrote: post #84
anonymousDan wrote: post #62

Earlier quoted context omitted.

Eh? Think you need to get your facts straight: https://amp.independent.ie/business/irish/ireland-contribute...

Hm? "For the first time since it joined the bloc in 1973" "Since 1973, Ireland has received over €50bn."

So what, your point was that the only reason Ireland can maintain a low corporation tax rate is they benefit from EU funding. And here we are today with Ireland a net contributor to the EU and yet they still manage to maintain a low corporation tax rate.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#137

Post by ionised »

whb07 wrote: post #129
ionised wrote: post #106

Earlier quoted context omitted.

Google and Facebook have a lot more to lose than the EU in this regard, which is why they will eventually submit to whatever the EU deems reasonable. They are never going to withdraw from the EU. The money they would lose would be immense. The fact that people think Google and Facebook have this kind of power over a developed market of 500 million people is hilarious.

They don't have offices and don't pay taxes for 99% of countries. I don't see you standing up for the sovereign rights of the people from French Guiana or Egypt or Sudan. You see it just so happens that the full breadth of services offered by Facebook and Google are available essentially with a simple internet connection. I'd dare say you could sign up for Gmail and Facebook as a scientist living in Antártica and who…

I'm not even sure what point you are trying to make with this rant other than what sounds like tax is theft.

Would you rather multinationals were not taxed at all? If something is tricky to get right is it not worth doing at all?

If that's what you believe you're not going to find many on your side.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#138

Post by jaclaz »

ptaipale wrote: post #117
jaclaz wrote: post #112

Earlier quoted context omitted.

VAT is a tax paid by the "last" link in the chain, the user, not by the supplier. Quick example, you are into the business of making - say - lemonade. Set aside the machinery involved, you buy lemons, water and sugar. The BOM for 100 glass or lemonade is: - 100 lemons 15 € + 0.6 € (VAT is 4 % on lemons) - 25 liters bottled mineral water 10 € + 2.2 € (VAT is 22% on mineral water) - 0.5 Kg sugar 0.70 € + 0.07 (VAT is 1…

> VAT is a tax paid by the "last" link in the chain, the user, not by the supplier. Not quite. As Wikipedia puts it, VAT is collected incrementally, based on the surplus value, added to the price on the work at each stage of production. That is the actual tax incidence. That the tax payment is channeled via the last link in chain is just a technicality relevant for the most efficient implementation of this incrementa…

>Not quite.

The one that pays the actual tax is the one getting the last (most valued) item, i.e. the final user (consumer).

The way it is collected (incrementally) is not connected to WHO pays WHAT.

If an user pays 122 € (100+22 €) that is the total tax (and is payed integrally by the user).

The government gets in total 22 € (integrally paid by the customer at the end) but it receives that amount in (say) 3 steps by differnt actors:

1 - 10% of 30= 3 The manufacturer buys the raw material, pays the VAT to the supplier that (hypothetically) has no preceding VAT costs and thus must give to the government the whole 3 €

2 - 22% of 80= 17,60-3= 14,60 then he does something with it and resells the product for 80 (i.e. it adds value, reselling it for 80 + VAT to a shop) and has to give to the government the differnece

3- 22% of 100=22-17,60=4,40 the shop sells the item to a consumer and has to give to the government the difference

The government gets 3+14.60+4.40=22 € The final user has paid 22 €

The incremental collection method allows to have the tax largely paid in advance, but the amount at the end comes out of the final user pocket.

The Wikipedia has it very clear:

https://en.wikipedia.org/wiki/Value-added_tax

https://en.wikipedia.org/wiki/Value-added_tax#With_a_value-a...

https://upload.wikimedia.org/wikipedia/commons/2/28/VAT3b22....

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#139

Post by ptaipale »

germanier wrote: post #98
ptaipale wrote: post #87

Earlier quoted context omitted.

What? In EU, Google is taxed for each ad income, as well as app sales, based on the country of where the sale takes place. It's called Value Added Tax. Countries can set the rate. Mostly the rates are in the order of 20 %.

Google's customers are almost all VAT collecting companies. That means that not Google but their customer is responsible for paying the tax. It can be deducted from their tax burden they have because they sell to end-consumers. The point of this discussion is not the tax on the sale itself (which is indeed already there) but on the profit at Google that results of this sale.

Google has plenty of non-VAT-collecting consumers as customers. For instance, anyone who purchases apps or makes in-app purchases.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#140

Post by jmfayard »

SilentCrossing wrote: post #115
jmfayard wrote: post #34

Earlier quoted context omitted.

> Competition, including taxes, is great for Europeans. If we study history we see that competition is one of the components that resulted in the dominance of the west. (see Civilization: Is the West History? I don't know. Competition for making the best science, technology, music, literature, food, ... seems different to me than just giving big corporations clever ways to avoid paying taxes for funding education, so…

I agree, that having companies compete on bringing out the best products or services is different from having countries compete on taxes. Just to clarify, countries do not give big corporates clever ways to avoid paying taxes totally, but do give them ways to pay less taxes in order to make themselves more attractive. There are various reason they do this, but they only do it if they as a location is not attractive c…

There are better ways than a broken tax system to help less attractive regions, for example less deflationary pressure from countries like Germany. A deal better than the status quo is possible
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