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Tech giants face 2% UK digital services tax

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Re: Tech giants face 2% UK digital services tax

#161

Post by chongli »

liftbigweights wrote: post #158
chongli wrote: post #138

Earlier quoted context omitted.

There's lots of innovation and quality tech in Europe. We just don't see it because Europe has much greater diversity of language and culture than North America. This means that companies can target a niche in their country that has zero relevance to Americans. Not everything of value needs to be a billion dollar unicorn. There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy.

> There's lots of innovation and quality tech in Europe. I agree. > We just don't see it because Europe has much greater diversity of language and culture than North America. This means that companies can target a niche in their country that has zero relevance to Americans. But then how come american companies are able dominate europe and even the world? On the flip side, how come canadian companies aren't dominating…

Canadian companies are struggling because our best CS and SE grads are going "Cali or bust." Believe me, I'm enrolled at University of Waterloo and I see it every day. People fight like crazy for the best co-op jobs in California. Why? Because they pay a lot more.

It's a chicken and egg problem. Quebec is different though. There's a lot going on in Quebec in French that we don't see in the English-speaking press. Same goes for the major languages in Europe. Of course none of these will "dominate the world" because they're not in English.

Re: Tech giants face 2% UK digital services tax

#162

Post by shady-lady »

notahacker wrote: post #49
7952 wrote: post #33

Earlier quoted context omitted.

Although isn't it the case that the actual product is almost entirely developed outside of the UK. It doesn't seem unreasonable to repatriate money to pay for that. It is exactly what happens to physical products that are manufactured overseas. The correct way of taxing that is VAT.

Companies aren't repatriating profits to Ireland or Bermuda because they're developing the product there...

If you built a software product, would you consider your customer service & sales staff part of that? How about the people who ensure the systems are kept running? How about the accountants & lawyers who are eligible to practice in those jurisdictions and know the relevant tax codes/laws?

Do you think your software product, if made in USA, would be bought in France or Germany or Italy or anywhere but North America if you did not have someone who worked in that timezone and spoke that language and knew that culture?

Would those people who did that role be considered an important part of your company, considering you would not have anywhere near the same number of sales from those regions if they did not exist?

To pre-rempt the "I'd outsource it" response. When 7+ figures of revenue(& profit) are at stake, I can assure you that you would change your mind. Or if you would not, the new guy the board hires to replace you would.

Re: Tech giants face 2% UK digital services tax

#163

Post by NeonVice »

Jmcdd wrote: post #113
sys_64738 wrote: post #93

This will start out as 2% in 2020 but probably be 10% by 2030. That's usually how these things work in the UK.

Good

I disagree that this is good. Volatile tax rates and regulations make businesses less likely to invest and innovate. They will spend more of their time hiring lawyers and accountants, spending less time producing valuable goods and services.

Re: Tech giants face 2% UK digital services tax

#164

Post by mattmanser »

martinald wrote: post #135
theptip wrote: post #132

This looks like it is on gross sales? If so that would hurt low-margin companies quite a lot; I imagine Amazon would be essentially forced to increase prices by 2% for example.

The problem is for highly global, IP based companies it is very difficult to tax profits. You can just create a 'cost' (platform license fee, trademark cost) in another sister company (that is in a low/no tax jurisdiction) and charge it to the UK based one that is equal to the profit. Boom, no profit due to tax. Not really sure what the best solution is. The UK isn't really big (or competent, depending on your outloo…

We've had 6 tech companies breakthrough billion $ threshold this year.

We're the biggest tech company creator in the EU.

Sounds more like you've got a small (or incompetent, depending on your outlook) source of information.

In the past year, the UK has added six billion-dollar tech companies worth $12.4 billion to its club of 26, more than any other European market, and has produced the highest number of billion-dollar companies in Europe since 2000 – contributing $64 billion to Europe’s $240 billion ecosystem of billion-dollar tech companies

https://www.information-age.com/tech-titans-europe-end-big-t...

Re: Tech giants face 2% UK digital services tax

#165

Post by OJFord »

mr_toad wrote: post #101
stephengillie wrote: post #10

They'll probably back down when companies threaten to leave. Like Amazon did when threatened with the Head Tax. Or how Dole left Hawaii.

It’s just another sales tax. Amazon already deals with hundreds of different tax rates in different jurisdictions. They’ll just price it in.

Amazon's not always the cheapest as it is. If it prices it in, then competitor's start to look more attractive; which is exactly the point.

Re: Tech giants face 2% UK digital services tax

#166

Post by kbenson »

beastnumber wrote: post #127
sys_64738 wrote: post #93

This will start out as 2% in 2020 but probably be 10% by 2030. That's usually how these things work in the UK.

That's how taxes everywhere usually work.

> That's how taxes everywhere usually work.

So, taxes everywhere usually see a 500% increase over 10 years? Forgive me if I require some sort of evidence for a claim as extreme as that.

Re: Tech giants face 2% UK digital services tax

#167

Post by ck425 »

bepotts wrote: post #145
chongli wrote: post #138

Earlier quoted context omitted.

There's lots of innovation and quality tech in Europe. We just don't see it because Europe has much greater diversity of language and culture than North America. This means that companies can target a niche in their country that has zero relevance to Americans. Not everything of value needs to be a billion dollar unicorn. There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy.

English is the business language of the world. I highly doubt there's some tech epicenter near Brussels that would rival Silicon Valley (or even New York City, Seattle, or Austin) if only those companies spoke English. And sure being a Unicorn is everything, but it sure as hell isn't nothing. I have no doubt there there is a company in Europe doing something amazing, but Europe doesn't have a culture that continues t…

That regulation (and the attitude to business and its place in society) is the reason every employee is entitled to 29 days annual leave min, I can't get sacked at any time for any reason and I don't have to pay medical insurance (hell I didn't know what it was till my mid twenties) cause the NHS.

Sure it discourages business in ways, but in many ways it creates a better society. Business isn't fundamentally good and regulation isn't fundamentally bad either. Remember that it's regulations that banned slavery and child labor.

Re: Tech giants face 2% UK digital services tax

#168

Post by mattmanser »

module0000 wrote: post #130
nurino wrote: post #66

Earlier quoted context omitted.

There's absolutely nothing wrong with a government tipping the playing field towards local companies.

Yes there is, especially if it results in the consumer paying more for a product. That's the government taking (additional) money away from you, and handing it to a local company. If that doesn't make sense, an example could help when you want to buy a hypothetical WidgetBox. Amazon WidgetBox: $100.00 Local WidgetBox: $102.00 After the added tax on Amazon, now you have no choice but to pay $102.00 for something you c…

Apart from the local company's payroll makes up $50 of that cost, of which $20 goes to taxes, so society is still up $18.

It's far more complicated than you make it seem.

Re: Tech giants face 2% UK digital services tax

#169

Post by microcolonel »

ilikerashers wrote: post #3

The UK has gotten very frustrated with the slow movement of international lawmaking in this space. With business rate slashes to help struggling retailers (retaliation against Amazon) and mental health funding increases for schools (retaliation against Facebook/Google), I'm quite happy to see something happen at last. I expect other governments to follow suit. From a tech defence angle, I can't see Trump rallying in…

> The UK has gotten very frustrated with the slow movement of international lawmaking in this space

The space of... international laws to transfer money for literally no reason to the government of the UK, even though they have no services or investments to recuperate related to the money in question?

I mean, it's fair that everyone asks for a slice of the pie, but that doesn't mean it's fair that they take it.

Re: Tech giants face 2% UK digital services tax

#170

Post by OJFord »

eertami wrote: post #36
chrisseaton wrote: post #34

Earlier quoted context omitted.

They aren’t evading taxes. If they were evading they’d be prosecuted rather than a new tax being introduced. They’re avoiding. Like we all do with our ISAs and pensions. If you misuse the terms it makes it harder for everyone to talk precisely about the issue.

>Like we all do with our ISAs and pensions I think it's a bit disingenuous to suggest it's like that, because the average person is not worth hundreds of billions of dollars. Sorry but you cannot in good faith compare the impact of tax avoidance by Amazon to an individual's pension. The problem really is that the loopholes are inaccessible to regular small businesses. A lot of small companies _do_ pay a fair level of…

It's not disingenuous, it's exactly the same motivation, just operating on a different scale.
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