Live data from Hacker News

France Plans 5% Digital Tax as Governments Chase Internet Giants

bloomberg.com

201–210 of 304 posts

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#201
post #162
post #109

Earlier quoted context omitted.

I can sell services domestically up to a limit of about 40,000 euros before I need to register and account for VAT. If I make even a single EU sale, I must immediately register for VAT and pay tax on that sale, either through MOSS or directly to the country my customer is in. The EU is now "generously" considering introducing a limit of 10,000 euros before you need to register for VAT. I also need to disagree with th…

> The EU is now "generously" considering introducing a limit of 10,000 euros before you need to register for VAT. No, that limit was passed in 2017 and took effect for digital services in January 2019: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32... I.e. if your cross-border EU sales of digital services are less than 10 000 €, you can consider the sales domestic.

Thanks for mentioning that! I remember reading that it was being discussed, but not that it had already been implemented.

It's not much, but still better than nothing.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#202
post #8

Earlier quoted context omitted.

Tax evasion is, but tax avoidance isn’t.

What's 'tax avoidance'? Doesn't everyone avoid tax when they claim expenses and make deductions?

Evasion is a bug in the tax code. Avoidance is a feature. Laws are written to create the possibility of avoidance - e.g. we add a 20% tax on cigarettes. We create a 20% tax credit on solar panels. We don't tax interest gains off of savings accounts.

For what it's worth it's pointless to complain about tax law complexity. Complexity increases with the amount of money you're trying to drag out of the economy. The more money you want the greater the temptation to create loopholes because they end up being worth more. Imagine a country where the tax rate is 100%. If you pass a law that taxes building cars at 90% you've effectively created an industry. Compare that with how much you'll be loved if the tax rate is 10% and you lower the tax on making cars to 9%. Still good but you'll only garner like not love.

Honestly this is why the details of tax law - how fair it is for example - only marginally interest me. The overall rate - and for that you might as well include borrowing, so it's easier to just ask - what percentage of GDP does the government spend are a lot more interesting to me.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#203
post #2

Couldn't we just ban tax evasion? What makes it so hard? (honest question) A recent European study has shown that the more company win money, the less they pay in taxes (in percentage). Is it because of bad laws? Corrupt politicians? Something else?

The point isn't tax evasion, it's France wanting more tax revenue without pissing off the public. Remember that the yellow vests protest started because of a tax increase on the general public.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#204

Earlier quoted context omitted.

I was listening to Presidential candidate Andrew Yang in his podcast with Joe Rogan. His plans, since there's a lot of avoidance, is to attempt a different route called a "value added" tax where there's a tax for trucking mileage and online transactions. He mentioned other countries to both of these, but don't remember which he mentioned off the top of my head. Here's the podcast for those interested, there's a lot o…

A VAT tax makes a lot of sense. It would reduce the incentive for large market quasi-monopoly seeking companies to optimize for no profits to avoid taxes. The current dynamic is- why pay taxes when you can spend it to expand your market share?

VAT in European countries is often the highest or the second highest revenue stream. The downside is that it's usually a flat tax and it disproportionately affects poor people.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#205

Earlier quoted context omitted.

They both have to manage finances, but governments are spending other people's money. A corporation is people risking their own money on profitable ventures. How you can think they are in any way similar is beyond me. Governments have little accountability because they are so large, and they can't "go out of buisiness" because they don't have competition. They merely have a quadrennial theatrical show where two "dire…

> governments are spending other people's money. A corporation is people risking their own money on profitable ventures This is what you choose to believe, to maintain your internal consistency in your own ideology. From the point of view of the law, it is the government's money after they tax you, and the government believes that it is their money, in order to maintain their internal consistency of their ideology th…

> This is what you choose to believe, to maintain your internal consistency in your own ideology.

Dude, they're completely different. A corporation has to provide services people want to use of their own volition. A government takes money off people without asking. They are completely unalike and it shows in how the operate. Risking other people's money is something anyone can do. Risking your own money means you need to make smart decisions. The government are inherently less smart than corporations because they lack the business sense that entrepreneurs have.

Politicians are paid generous salaries, but they're hardly fitting of such salaries for their abysmal performance in their management. If managers in any corporation were like politicians, they'd be sacked! Politicians are unlike such managers because they get to decide their own salaries too. Directors can chose their own salaries because it is their own money they're risking. Politicians are not taking any personal risk beyond their career aspects. They have no skin in the game. (In fact, their incentives are to enrich themselves whilst in office, even at the cost of the taxpayer they purport to represent).

> I have to pay a government in order to live on land that they have physical control of

I noticed you originally put owned, by were right to edit. Most land is privately owned, not by governments. Even most of the publicly accessible land is privately owned easements.

Although government doesn't own all of the land, they are effectively part possessors because they have some rights to it (at the cost of the owner's rights). This is simply more evidence that governments overstep their reach and encroach on people's lives. Ultimately, they rely on that monopoly of force, because given the choice in a free market, those land owners might chose somebody else to be the stewards of their land.

You have to ask, if governments should be the sole providers of stewardship of easements in a geographical area, why shouldn't they be the sole providers of food too? You say that you need to pay a corporation to eat, but shouldn't that service also be subsumed by government? Why even stop there. Let's have full on communism!

Well, that has been tried multiple times and it failed miserably every time. On the other hand, free markets have been tried and they were hugely successful in drastically improving the standard of living for millions of people. The evidence is clear. Corporations generate wealth and then the governments spend it. Anti-capitalists would have you believe the opposite is true.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#206

Earlier quoted context omitted.

I was listening to Presidential candidate Andrew Yang in his podcast with Joe Rogan. His plans, since there's a lot of avoidance, is to attempt a different route called a "value added" tax where there's a tax for trucking mileage and online transactions. He mentioned other countries to both of these, but don't remember which he mentioned off the top of my head. Here's the podcast for those interested, there's a lot o…

A VAT tax makes a lot of sense. It would reduce the incentive for large market quasi-monopoly seeking companies to optimize for no profits to avoid taxes. The current dynamic is- why pay taxes when you can spend it to expand your market share?

Except Digital sales take place in no-man's land, and are hard to tax. A federal tax hits Amazon, but would it hit Alibaba? The specifics are what make these ideas so difficult.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#207

Earlier quoted context omitted.

Exactly. What a lot of governments seem to want is some form of tax on foreign companies for the privilege of gaining access to their local population/market. For physical goods we call that an import duty.

They do indeed want that, but what is it that has changed recently that makes this so much more urgent? People claim that digitisation has changed the equation, but I don't understand why. Google is for the most part a regular US exporter. It appears to me that the only thing that has changed is that the US has left everyone else in the dust, which causes envy.

Governments need more tax revenue. Almost every country with social programs is on a timer to figure out ways to raise tax revenue to pay for those programs. Almost every developed country has a fiscal gap.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#208
post #118

Earlier quoted context omitted.

If the imbalance is that an Irish company is more competitive than a French one, then no, not really.

In this case, this will be the race to the bottom and smallest countries will be able to charge 0% tax just for the sake of office space rented since their domestic market is small enough to not bring much of income tax (Luxembourg for example). The issue here is with omitting responsibilities. If a company makes hundreds of millions of income in a country, it should pay some taxes there. There is a huge push in Pola…

There would be no race to the bottom if there was a real, tangible benefit to being established in a high tax country - ie, better public services, a more educated workforce, more business friendly environment, etc. As it is right now, very few countries justify their tax rates and that prompts people and businesses to do the rational thing and go where they pay less for the same thing.

I think it's very concerning that European countries are so focused on taxing access to their market rather than asking themselves the question of what they can offer to businesses and individual to make them more interesting as places to settle down or establish a company.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#209
post #137
post #48

Earlier quoted context omitted.

You are assuming that somehow that tax revenue is theirs in the first place. What if that tax rate makes a business non-profitable in France but a money-making machine in Ireland? Also, too much focus is centered around taxes when spurious regulations are generally more damning for a lot of companies. For example some friends of mine have attempted to start escape rooms, they have all abandoned their pursuits because…

> You are assuming that somehow that tax revenue is theirs in the first place. The big corporations that evade taxes are using the economic power, infrastructure and legal systems of countries without contributing to any of them. That is money that the corporations owe to the citizens of those countries. > What if that tax rate makes a business non-profitable in France but a money-making machine in Ireland? I see you…

Or more likely: fewer people do business. It would certainly explain Spain's economy.

Re: France Plans 5% Digital Tax as Governments Chase Internet Giants

#210
post #175
post #2

Couldn't we just ban tax evasion? What makes it so hard? (honest question) A recent European study has shown that the more company win money, the less they pay in taxes (in percentage). Is it because of bad laws? Corrupt politicians? Something else?

You make it sound as if taxation is a good thing. In much of the world capitalism, retained profits and growing the economy is used to make people wealthier. The countries with fastest growth and highest employment, healthiest companies tend to have lower tax rates (China, USA). Countries that treat companies as if they a problem that need more tax (much of Western Europe) tend to have high unemployment and poorly pe…

The countries with fastest growth and highest employment, healthiest companies tend to have lower tax rates (China, USA).

Another yardstick for comparing countries is how they treat and take care of the poor ones. High-tax countries often fare well in that and China, USA not so much.

Post reply on HN