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EU adopts global minimum 15% tax on big business

bbc.com

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

#161

Post by mpweiher »

dantheman wrote: post #87
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.

Are you confusing profit with revenue? The revenue is in France - easy. Profit is revenue - cost, which costs do you factor in?

> Are you confusing profit with revenue?

Don't think so.

Profit only happens when there is revenue.

Cost is a negative influence on profit, revenue is the positive influence.

If you have zero cost, you still have profit (provided you have non-zero revenue).

If you have zero revenue, you don't have profit.

So it is obvious that the profit is where the revenue is, even though revenue ≠ profit.

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

#162

Post by mhaberl »

Aulig wrote: post #148

Did I miss it in the article or was there no mention of where the cutoff is for "big" businesses? Or does it apply to all businesses?

The threshold is set to 750 million euros.

Here are the details: https://read.oecd-ilibrary.org/taxation/tax-incentives-and-t...

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

#163

Post by diggernet »

causality0 wrote: post #149
alkonaut wrote: post #136

Earlier quoted context omitted.

If I was trying to invent some “fair taxation scheme” I’d tax the profit based on the revenue in that country. So if a company had $100B global revenue and $10B global profit and 0% of the profit was in France while 10% of the revenue was in France, then the company should be taxed based on the $1B profit that can be attributed to France based on revenue there. Any other scheme seems it’s prone to creative licensing…

If you're trying to do fair taxation do away with "profit" taxes entirely. Not like any of us plebs get to dodge taxes by spending our income. Subtract what the company spends on salaries from its total revenue and then charge them 20-30 percent of the remainder just like the rest of us pay. "Corporations are people" after all. Toss in a seven percent sales tax on all stock purchases.

That would instantly bankrupt every single company in the many industries with single-digit profit margins.

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

#164

Post by cwkoss »

martinald wrote: post #25

This isn't really as big a deal as it's been made out to be, IMO. This is Pillar 2 of the OECDs tax reform for corporations. Pillar 1 is much more interesting, and would require corporations to actually book profits where they are made (so not putting everything through Ireland for example). This will have a much bigger impact imo than this 15% ruling, because right now there are a bunch of tricks you can use to get…

Is this a tax on profits? If so, I worry it will remain weak to hollywood-accounting attacks: it's easy to spend money until there are no 'profits'.

I'd really love to see progressive taxation of corporate revenue: the bigger a company is the higher the tax rate. Huge corporations benefit from economies of scale, so there is an incentive for power concentration. This power concentration is bad for society: it delivers increasing wealth disparity and allows businesses to grow "too big to fail" leading to corruption.

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

#165

Post by treewalking »

cwkoss wrote: post #164
martinald wrote: post #25

This isn't really as big a deal as it's been made out to be, IMO. This is Pillar 2 of the OECDs tax reform for corporations. Pillar 1 is much more interesting, and would require corporations to actually book profits where they are made (so not putting everything through Ireland for example). This will have a much bigger impact imo than this 15% ruling, because right now there are a bunch of tricks you can use to get…

Is this a tax on profits? If so, I worry it will remain weak to hollywood-accounting attacks: it's easy to spend money until there are no 'profits'. I'd really love to see progressive taxation of corporate revenue: the bigger a company is the higher the tax rate. Huge corporations benefit from economies of scale, so there is an incentive for power concentration. This power concentration is bad for society: it deliver…

It’s weird that individuals are taxed on revenue but corporations are (usually?) taxed on profit.

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

#166

Post by ClumsyPilot »

poszlem wrote: post #68
Negitivefrags wrote: post #33

I don't really like this kind of idea because it really goes against a kind of fundemental freedom. "If you don't like it, you can leave". Instead, laws around making sure that the profits generated from a countries citizens are taxed by that country make more sense to me. A lot of laws around that already exist, and I suppose a lot of people would say that they have not been effective. A lot of it comes down to the…

I wholeheartedly agree with this, and I think the idea "If you don't like it, you can leave" is one of the most important, if not THE most important freedom a person should have. It's the reason why former communist countries took passports away from their citizens. It's the idea that we know what's best for you and you better adapt because there is no escaping. It's the fundamental idea of many social justice moveme…

nokne us stopping anyone from leaving EU markets. This whole post is a hissy fit about wanting to have your cake and eating it too

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

#167

Post by badpun »

techpression wrote: post #72

Meanwhile the Swedish government is giving massive incentives to Amazon, Google, Facebook and Microsoft to build data centers (and I assume other countries do too). Almost zero taxing on electricity and actual monetary payouts. In other words, this is a bit of a headline without any actual teeth (there’s plenty of ways to compete unfairly), which is the problem when you start wanting to govern the world, you can’t co…

In Poland, there's plenty of "special economic zones" and the companies which establish there are off the hook for corporate income taxes for the next 30 years (IIRC). Other EU countries probably also have similar things?

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

#168

Post by im3w1l »

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…

What about only taxing B2C revenue? Then the degree of vertical integration wouldn't matter.

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

#169

Post by ClumsyPilot »

mywittyname wrote: post #106
tmtvl wrote: post #99

Earlier quoted context omitted.

Then where do we get the money to pay for things like the justice system, law enforcement, national infrastructure, unemployment benefits, healthcare, pensions, customs, diplomats,...? Switch to a system where the government owns everything and gives people what they need if they work properly?

Inflationary/deficit spending. The MMT argument for taxation is that it's necessary to encourage demand for a currency, thus making it more valuable. But there's no fundamental reason that a government which controls its own currency must collect taxes to pay for various services. Congress could pay state and local governments directly each year. If you're willing to throw away some property rights, then state and lo…

> If you're willing to throw away some property rights, then state and local governments could theoretically lease land as a means of raising revenue without direct taxation. (this is a terrible idea)

Why is it a terrible idea?

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

#170

Post by toast0 »

mpweiher wrote: post #160
toast0 wrote: post #54

Earlier quoted context omitted.

Why should the profit be made in france if the engineering that went into delivery was made in the US, the content was made in X, the deal for the content was negotiated in Y, network source is Z (probably france, but not necessarily) VAT in France on the subscription makes sense, but figuring out where the profit lies, is more nebulous.

> engineering that went into delivery was made in the US That's a cost, not profit. > the content was made in X Cost, not profit. > the deal for the content was negotiated in Y Negotiating the deal also sounds like a cost to me. > network source is Z Cost. The profit is made where you get money, not where you spend it.

If you paid an external company to make all those things for you, they'd have profit in all those places, but if you do it in house, the profit just moves to the point of sale?

Why not replace income tax with VAT/sales tax if sales is the basis of taxation anyway?

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