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France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

reuters.com

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Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#21

Post by andrepd »

microcolonel wrote: post #13
Oletros wrote: post #10

Earlier quoted context omitted.

Are you saying that Apple or Google don't operate in Spain or France? What the heck has to do your claim of Spain or France being corrupt with Apple or Google declaring losses with record revenues?

> Are you saying that Apple or Google don't operate in Spain or France? While technically they do have offices in Spain and France, they are mainly service offices. The critical operations of Google are carried out in the United States, and to a (far) lesser extent, Canada, Japan, and various other places. > What the heck has to do your claim of Spain or France being corrupt with Apple or Google declaring losses with…

> Spain, for example, has a rather meh economy, meanwhile the state is funneling public funds into things like a concentrated solar plant which will probably never generate more revenue than expenditure. If not corrupt, then that is at least decadent.

I recommend you sit down, evaluate what you are saying, and try to figure out what on earth that has to do with corporate taxing.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#22

Post by jeffwass »

sddfd wrote: post #16

This is not about taxing revenues instead of profits. This is about taxing EU-wide profits in EU countries proportional to the revenues generated in that country. At the moment, many big tech companies use bookkeeping tricks to make it look like all their profit is generated in, for example, Ireland, while the revenue is generated in other EU counties. Unfortunately, Ireland has special tax rates for these companies…

Many American companies (including most or all YC startups) do the same, incorporating in the low-tax state of Delaware for favourable tax treatment even though the company's offices and bulk of revenue-generation are elsewhere.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#23

Post by cs702 »

I wonder what the impact will be on these companies' ability to compete against entrenched players in those EU countries. For example, will this make Amazon's prices non-competitive with European bricks-and-mortar retailers?

I also wonder what the impact will be on their stock prices, because taxes on top-line revenues have a disproportionate impact on profit margins. For example, a 5% tax on revenues would render Amazon unprofitable in the EU and would cut Google's 20%+ net profit margin by about a quarter in the region.

Finally, if this goes through, will other jurisdictions around the world follow?

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#24

Post by microcolonel »

the8472 wrote: post #14
microcolonel wrote: post #2

The idea of a revenue tax of course contradicts the stated justifications for existing taxes on business: the funding of ephemeral services which contribute indirectly to the business's revenue. Google benefits from approximately no government infrastructure in France, Germany, Italy, or Spain, but they want to get their grubby hands on it nonetheless.

> Google benefits from approximately no government infrastructure in France, Germany, Italy, or Spain They directly depend on the infrastructure to reach their customers. And they indirectly depend on the people having a high standard of living which also requires infrastructure. If your country is a 3rd-world shithole without infrastructure you'll have a very hard time selling your products which sit high on maslow'…

Which infrastructure? What infrastructure in France, Germany, Italy, or Spain, which is used by Google to reach their customers, is built and/or maintained by the governments of those countries?

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#25

Post by immad »

jeffwass wrote: post #22
sddfd wrote: post #16

This is not about taxing revenues instead of profits. This is about taxing EU-wide profits in EU countries proportional to the revenues generated in that country. At the moment, many big tech companies use bookkeeping tricks to make it look like all their profit is generated in, for example, Ireland, while the revenue is generated in other EU counties. Unfortunately, Ireland has special tax rates for these companies…

Many American companies (including most or all YC startups) do the same, incorporating in the low-tax state of Delaware for favourable tax treatment even though the company's offices and bulk of revenue-generation are elsewhere.

If you have headquarters in California you pay tax here as well as a bit in Delaware

The reason to register in Delaware is because of business friendly courts there. I don't believe there is a tax advantage

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#26

Post by agumonkey »

I find the whole system lame. I feel web giants of today are not making the web better, just different, more structured and massive. Instead of taxing them to grab a share of their earnings (whether it makes sense or not), I'd be happier if more people would write longer and denser web page as it was until the late 90s. Give incentives for people to produce.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#27

Post by taxthrowaw4y »

jeffwass wrote: post #22
sddfd wrote: post #16

This is not about taxing revenues instead of profits. This is about taxing EU-wide profits in EU countries proportional to the revenues generated in that country. At the moment, many big tech companies use bookkeeping tricks to make it look like all their profit is generated in, for example, Ireland, while the revenue is generated in other EU counties. Unfortunately, Ireland has special tax rates for these companies…

Many American companies (including most or all YC startups) do the same, incorporating in the low-tax state of Delaware for favourable tax treatment even though the company's offices and bulk of revenue-generation are elsewhere.

I don't think this is correct. It is more about case-law and the legal support system for companies in delaware. I do not believe the companies are taxed based on which state they are incorporated in. The exception is the franchise tax fee, which is a nominal amount even to a company with only six figures of revenue.

http://www.bendlawoffice.com/2011/08/01/reasons-to-incorpora...

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#28

Post by the8472 »

cs702 wrote: post #23

I wonder what the impact will be on these companies' ability to compete against entrenched players in those EU countries. For example, will this make Amazon's prices non-competitive with European bricks-and-mortar retailers? I also wonder what the impact will be on their stock prices, because taxes on top-line revenues have a disproportionate impact on profit margins. For example, a 5% tax on revenues would render Am…

> “The amounts raised would aim to reflect some of what these companies should be paying in terms of corporate tax,” the ministers said in the letter, first reported on by the Financial Times.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#29

Post by Nokinside »

There is room for innovation in taxation. We need new smart taxation for information economy.

Taxing network externalizes and economic barriers for entry for example. Taxation could be used as natural pressure to correct market failures. Taxing revenue is not what EU countries propose, but it could be viable solution.

Thinking aloud: If company has market share of X% of the population it pays tax from the revenue related to X. If retail company that has 30% market share pays 0.3% extra from its revenue compared to tiny company with just 10,000 customers, it would probably be enough to even out the field and limit barriers to entry.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#30

Post by ben_w »

Oletros wrote: post #3
microcolonel wrote: post #2

The idea of a revenue tax of course contradicts the stated justifications for existing taxes on business: the funding of ephemeral services which contribute indirectly to the business's revenue. Google benefits from approximately no government infrastructure in France, Germany, Italy, or Spain, but they want to get their grubby hands on it nonetheless.

When Google or Apple declares losses in Spain having record revenues so they have fiscal benefits when that country has a very big crisis then we have a big problem. But hey, those countries ajust want to get their grubby hand in those poor companies.

> just want to get their grubby hand in those poor companies

I find it fascinating that such emotive language is used. Taxation is pretty much the least "grubby" hand a government has (military: give us all your stuff, legislature: do all our work for us, we will tell you what we think adequate compensation is); and these companies are not only not poor, they are among the richest on the planet and they got almost all of that wealth this century.

But why won't anyone think of those poor, starving, unemployed, multi billion dollar international corporations? :P

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