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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

#181

Post by peoplewindow »

lucideer wrote: post #50
DannyBee wrote: post #31

"This resulted in estimated revenue losses for EU states, other than Ireland, of between 51 and 54 billion euros between 2013 and 2015, the report concluded." So if i understand this right, this is basically: the EU didn't really lose anything, since ireland is in the EU, but the other states would have gotten more in total if they weren't allowed to do this? My other understanding is that the tax laws of all the EU…

> My other understanding is that the tax laws of all the EU countries are not controlled by the EU, but by the individual countries? This is partially but not 100% correct. Tax laws are controlled or "administered" by individual countries but overseen by EU directives. This means that while individual countries apply the law, their application must comply with EU guidelines. The Irish government has been found guilty…

Can you cite the parts of the treaties that say that?

The reality is that in the treaties the EU very explicitly does not have control over tax. In fact, this was a key issue in the last Irish referendum on the EU treaty changes. The Irish rejected the treaty until they received explicit assurances from the EU that they'd never lose any control over local tax and the EU wouldn't attempt to undermine their local corporate tax rates.

But as it turns out, the EU's assurances on such things were useless and the Irish people were misled.

http://news.bbc.co.uk/1/hi/8288181.stm

Irish opinion is thought to have swung behind the "Yes" vote this time because of the severity of the economic downturn, as well as the legal "guarantees" on Irish sovereignty that the EU pledged after the first referendum. The legally binding "guarantees" state that Lisbon will not affect key areas of Irish sovereignty, such as taxation, military neutrality and family matters such as abortion - significant issues in last year's campaign in Ireland. But they have not yet been attached to the treaty.

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

#182

Post by whb07 »

lovich wrote: post #174
whb07 wrote: post #126

Earlier quoted context omitted.

Why would they be leaving it? I can easily connect to a Russian website with servers in Moscow just fine from anywhere in the world. The same applies to EU citizens. I'm a strong believer in freedom, to include freedom from unnecessary taxation. If G/F "leaves" EU, I meant it by closing physical locations and the farce they have to put up with for taxes, they could still serve citizens from EU. Id love to see the sto…

Is unnecessary taxation all taxation? By your argument every company should just find whatever the lowest tax area of the world is and set up their headquarters there, no one will be able to stop them! Also, if you believe in freedom, why don't you believe that countries have the freedom to stop these massive corporations from extracting wealth from their society and returning nothing? Why does only the corporations…

I don't subscribe to your second paragraph at all. "Extract wealth" how? I'm from the third world and I can instantly tell you the great value that people derive from applications like What's App and the like. To someone in EU or US it's easy to deride these silly applications, but to those who lack the infrastructure it gives new possibilities.

Take for instance the case of using what's app as a little store where people can offer services/goods. My mother in law dedicates her account on what's app to sell hand knitted baby clothes, and it provides her with reliable communication to clients.

Such applications are a NET BENEFIT to everyone involved and it's clear why What's App was given such a high price tag!

If I might ask what/where you are from that you think this way? I can tell you from personal experience and fundamental Adam Smith basic economics that these companies offer vastly more benefits to consumers and society as a whole than what little money can be taxed from them.

Also note, that Latin American countries and 99% of other countries don't propose to tax the tech companies and they still have vast benefits.

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

#183

Post by ringtail »

lovich wrote: post #172
ringtail wrote: post #68

Earlier quoted context omitted.

Are you saying Singapore Co cannot receive payments from French consumers unless they pay corporate income tax to French Govt ? In other words, you are saying EU can deny its citizens right to buy foreign products ?

Countries restrict their citizens from buying foreign products all the time? The US did it to Cuba as an entire economy

National Security is different matter. Even that can only be done to few countries. Can US or any other country do it whole world ? I highly doubt it.

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

#184

Post by tormeh »

DVassallo wrote: post #20
Oletros wrote: post #11

Earlier quoted context omitted.

I wonder how much revenue and profit would have lost Google and Facebook if they didn't exist in the EU

How do they "exist" in the EU? One way to see it is that people from the EU are simply buying services from a US company. It's as if they caught a plane, and paid at a cash register in California. But instead of making the trip, they just sent a check.

EU companies pay for advertising there. You know, their customers. They sell to customers in the EU. The social network/search thingy doesn't have any relevance to tax - it's their advertisement business governments want a slice of.

If there's any problem with taxation any country can order its banks to not process payments to Google/Facebook. Tax authorities don't give a shit who hosts the citizenry's family photos. That's not what "operating in" a country means.

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

#185

Post by peoplewindow »

marcell wrote: post #14

Strategically, I wonder Google/FB/etc. would do better to pay more taxes. The recent GDPR is a total disaster for them. Maybe it could have been avoided if they paid more taxes, and were on friendlier terms with the EU.

They can't be on friendly terms with the EU because this issue is being driven by internal EU politics and not really anything specific to tech.

The poster above has it right. The EU's goal is to become a new country that eliminates the existing countries. To do that it must have either have its own tax base, or control the member states tax. It is working on both of those simultaneously, trying to control Ireland's tax policies, and also trying to treat fines on tech firms for vague anti-trust "violations" as a kind of taxation. Note that the EU Commission does not have to win in court to claim billion dollar fines, they can simply declare a fine by fiat, thus giving them a massive incentive to abuse their powers.

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

#186

Post by AndrewKemendo »

staticelf wrote: post #56

I really hope a new tax bill comes through, I am tired of US companies (and others) that can simply avoid paying tax while small shops pay a lot of taxes in the EU. They use our well developed infrastructure for their own benefit and does not pay anything back. I hope they get a fat bill.

They use our well developed infrastructure for their own benefit

Can you explain your reasoning more?

So, for example an internet user in the EU is paying some local ISP to request services from google.com. The ISP presumably pays taxes on the revenues or profits from using local fiber & infrastructure in order to connect the user with google.com.

In this case, they are no different than any other website/domain/internet service aside from scale and all of the taxes to fund infrastructure would come from the ISP and some portion of government financing.

What I am missing is how Google is "us[ing] our well developed infrastructure for their own benefit" in a different manner than say skysports.com?

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

#187

Post by ringtail »

tormeh wrote: post #184
DVassallo wrote: post #20

Earlier quoted context omitted.

How do they "exist" in the EU? One way to see it is that people from the EU are simply buying services from a US company. It's as if they caught a plane, and paid at a cash register in California. But instead of making the trip, they just sent a check.

EU companies pay for advertising there. You know, their customers. They sell to customers in the EU. The social network/search thingy doesn't have any relevance to tax - it's their advertisement business governments want a slice of. If there's any problem with taxation any country can order its banks to not process payments to Google/Facebook. Tax authorities don't give a shit who hosts the citizenry's family photos.…

Banning 2 corporations is one thing and banning all offshore corporations another. Would citizens go along with this ? Never.

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

#188

Post by alkonaut »

ringtail wrote: post #180
alkonaut wrote: post #177

Earlier quoted context omitted.

Yes, all kinds of secondary effects may come of this. Such as price increases, (and from that then tertiary effects such as reduced consumption). A reasonable effect is also companies moving around somewhat to get closer to business rather than close to low taxes. In this example Swedish consumers would potentially see price increases - but on the other hand they could see tax reductions if the increased tax revenue…

A reasonable effect is also companies moving around somewhat to get closer to business rather than close to low taxes. Why ? The payroll will increase even if profit remains the same. The losers in the above scenario is the Irish because they'd see increased prices, lost jobs, and potentially raised taxes to offset lost corporate tax revenue. I doubt it. Consumption tax are never popular. Instead of businesses, the p…

Ok now I'm not sure what you are arguing: are you saying this is a bad idea because it is too hard to implement?

Or a bad idea because of how it would increase corporate taxes, which would land on consumers?

I can't see how it would be a net negative for those countries that would get a nonzero corporate tax from megacorps that today contribute around zero. Even with price increases, the net effect seems like it would be positive

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

#189

Post by ringtail »

alkonaut wrote: post #188
ringtail wrote: post #180

Earlier quoted context omitted.

A reasonable effect is also companies moving around somewhat to get closer to business rather than close to low taxes. Why ? The payroll will increase even if profit remains the same. The losers in the above scenario is the Irish because they'd see increased prices, lost jobs, and potentially raised taxes to offset lost corporate tax revenue. I doubt it. Consumption tax are never popular. Instead of businesses, the p…

Ok now I'm not sure what you are arguing: are you saying this is a bad idea because it is too hard to implement? Or a bad idea because of how it would increase corporate taxes, which would land on consumers? I can't see how it would be a net negative for those countries that would get a nonzero corporate tax from megacorps that today contribute around zero. Even with price increases, the net effect seems like it woul…

Its very high consumption tax. Effective, implementable but harder to get public support for. Cost of living (CoL) would rise. High corporate tax means high CoL. Every percentage increase will make it worse than last percentage. Wages would have to rise significantly. This will discourage business from moving to high-tax countries. People will likely move to low-tax countries.

I can't see how it would be a net negative for those countries that would get a nonzero corporate tax from megacorps that today contribute around zero. Even with price increases, the net effect seems like it would be positive

Because countries are not getting new money. Old money is just cycling between govt and people.

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

#190

Post by themihai »

anonymousDan wrote: post #145
themihai wrote: post #75

Earlier quoted context omitted.

Well I don't see any issue repatriating taxed profits. After all they go to a different market to make a profit, right? The issue is when they don't pay their fair share of tax by using various tax evasion schemes more or less "legal".

The reason why they don't pay their fare share of tax is down to US repatriation laws, nothing to do with Ireland: http://www.rollingstone.com/politics/news/the-biggest-tax-sc... The reason they pay so little tax in the EU is that in line with international law they pay it in the country where most of the innovation that drives those profits occurs, i.e. the US. Or at least they would if the US wasn't basically using…

>> they pay it in the country where most of the innovation that drives those profits occurs, i.e. the US.

I believe that's quite unfair and wrong and pretty much BS. You ignore the fact that by allowing a "monster" company like Apple to sell in your country you undermine any potential local manufacturer. See the internet industry in China. Would there be Baidu, Alibaba, Weibo etc leaders in the industry without protectionist policies?I highly doubt it! You would see Google, Amazon, Facebook and Twitter. You ignore the fact the the profit made in EU helps Apple to innovate in the US. Without investment/money there is little innovation.

Paying taxes in US for products sold in EU is like Ikea planting trees in Germany to make up for the ones chopped off in Canada. The point is to give back where you make profit, at the point of sale otherwise you end-up with wastelands. You can do that by paying taxes(so that the local gov. can invest on your behalf) or by investing in the local community(i.e. jobs/R&D).

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