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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

#211

Post by dangsmum »

Oletros wrote: post #198
dangsmum wrote: post #141

Earlier quoted context omitted.

google is just finishing its restructuring to xxvi holdings, apple has had all its cash outside of the us for quite some time.

I repeat, you're confusing headquarters with presence. If yu're seriously saying that Apple or Goole have left USA and the EU you're really don't know what we're talking about

i think you are confusing appearence with physical existance. much like the eu that thinks they can apply their laws and taxes to a world where reincarnation is a "real" thing available at a few clicks of a keyboard.

and servers are now homed deep under the sea.

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

#212

Post by SilentCrossing »

Iv wrote: post #130
SilentCrossing wrote: post #124

Earlier quoted context omitted.

It is a competition on who has the sovereign power to levy tax. Brussels or the individual country.

Sure. In my book a competition is between two peers. When the two competitors are grossly asymmetrical I call that a conflict, and consider we are outside of the free market doctrine, but whatever floats your boat.

Good point. I do not dispute your wording.

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

#213

Post by ptaipale »

user5994461 wrote: post #95
ptaipale wrote: post #87

Earlier quoted context omitted.

What? In EU, Google is taxed for each ad income, as well as app sales, based on the country of where the sale takes place. It's called Value Added Tax. Countries can set the rate. Mostly the rates are in the order of 20 %.

I am not sure if it's still ongoing but any immaterial good you buy on a major website used to be taxed at the Luxembourg rate, which is the smallest in Europe. It's a pretty clear sign that sales are not attached to the country of the customer.

This changed long (10-15 years) ago.

When I (resident in Finland) buy stuff from web shops in Germany, I pay tax at the higher Finnish rates, and it is withheld by the seller.

(When I buy from e.g. China, I pay VAT at the customs, including VAT on freight.)

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

#214

Post by Eridrus »

staticelf wrote: post #201
Eridrus wrote: post #159

Earlier quoted context omitted.

I don't really see why foreign companies should be paying any (non-sales) tax in the EU at all. If you ship a physical product to the EU from China, no-one expects the Chinese factory to pay taxes on their EU revenues. Of course tech companies are not blameless here, they have decided that paying taxes in Ireland is preferable to paying taxes in the US, but if they had their tax location in the US, I don't see how th…

So you mean that companies like Facebook and Google that uses my countrys roads, medical system (for their employees, you don't need to pay for that in my country) and similar stuff, they should pay no tax? Facebook have a big datacenter in my country, partly funded by the government. But yeah, they should pay no taxes. They only consume a lot more of everything than any other company and should give nothing back. I…

Your employees pay taxes for healthcare, I'm sure you have some sort of tax on petrol to maintain your roads, I'm sure the local trucking company that actually drove on the roads paid some taxes. I'm sure they pay property taxes on the land they use if you have them. I'm sure they pay for water permits and all that for cooling too.

The question is, why is your country entitled to tax their revenue/profits? That is far bigger than the marginal stress they put on your resources.

If they were a company selling physical products that they paid someone like DHL to deliver, this would be a completely silly discussion.

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

#215

Post by lovich »

dangsmum wrote: post #210
lovich wrote: post #207

Earlier quoted context omitted.

Cyberspace is not some metaphysical entity that exists in the ether. Every website, every connection, is being run on physical hardware. I'm not arguing that cutting off access to something on the internet would be easy or even feasible, and it would hurt any coubtry that tried to, but it is entirely possible

every website is a law unto only itself, every connection breaks the "physical" limits of national borders. the cat is out of the bag and the old powers that be have no power to keep their human slaves on the farm. https://www.eff.org/cyberspace-independence

Physical isn't in quotes in what I'm saying. A country can actually cut off access to the internet, it just costs them all the benefits of the internet. Send out a couple of guys with axes or a boat with an achor and you can cut off access completely

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

#216

Post by taysic »

aembleton wrote: post #160
theptip wrote: post #102

Earlier quoted context omitted.

A problem with this solution -- as a US company without a German subsidiary (but as with most online businesses, with German customers), do I now have to pay taxes in Germany? If the former, the logical conclusion of that approach is that every startup has to pay taxes in all 195 countries of the world, as soon as they open for business. This could be on $0.01 of ad revenue. If the latter, I'm strongly incentivized t…

No, you wouldn't have to pay taxes in Germany. But, if you sell to German businesses, such as providing hosting services then they wouldn't be able to deduct that as costs when calculating their taxes. They would only be able to deduct German costs, defined as the employment of someone with a NI number (or German equivalent) or another business with a tax number.

So you disincentivize using any services in countries other than the one your subsidiary is in? They would have to be significantly better than other options to be worth not being able to deduct those costs.

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

#217

Post by taysic »

aembleton wrote: post #163
aembleton wrote: post #88

Earlier quoted context omitted.

Require UsTech to run their sales to their Ireland and German customers through their Ireland and German subsidiaries. Then tax them based upon the result of their (sales to Irish customers - Irish costs) and in Germany, the equavelent (sales to German customers - German costs). It's quite possible in those two places, they would pay no tax because their costs are higher, but this is also an incentive to keep employi…

I should add that it would only be possible to require a company to have a local subsidiary if it has a physical presence in the country. Someone like Amazon will because they have warehouses. Someone like Google could probably get away with doing business remotely, but then any business that buys from them would not be able to deduct that as a cost when calculating tax which would effectively mean that they pay the…

So unfair competitive advantage to the local companies? If it were so easy I wonder why they don't do this already.

Additionally what about services or products that don't exist or haven't had time to be replicated in one's country. Then that country cannot be on the cutting edge of new technology simply because they penalize buying from international companies.

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

#218

Post by aembleton »

taysic wrote: post #217
aembleton wrote: post #163

Earlier quoted context omitted.

I should add that it would only be possible to require a company to have a local subsidiary if it has a physical presence in the country. Someone like Amazon will because they have warehouses. Someone like Google could probably get away with doing business remotely, but then any business that buys from them would not be able to deduct that as a cost when calculating tax which would effectively mean that they pay the…

So unfair competitive advantage to the local companies? If it were so easy I wonder why they don't do this already. Additionally what about services or products that don't exist or haven't had time to be replicated in one's country. Then that country cannot be on the cutting edge of new technology simply because they penalize buying from international companies.

It would be an advantage to local companies - yes! At the moment, local companies are often at a disadvantage because they're paying more tax than those companies who are legally based overseas.

If the product or service doesn't exist locally, then the purchasing company will indeed need to pay tax, if and only if it's local sales are greater than local costs. If buying this overseas service such as AWS hosting gives it an advantage such as cheaper and simpler scaling then it may well be worth them buying it to pay the tax.

At the moment, an outside company can come in and pay little to no tax by licensing IP from another subsidiary in a third country. A local company is then at a disadvantage and is effectively paying for the infrastructure through their own taxes to support a competitor.

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

#220

Post by taysic »

aembleton wrote: post #218
taysic wrote: post #217

Earlier quoted context omitted.

So unfair competitive advantage to the local companies? If it were so easy I wonder why they don't do this already. Additionally what about services or products that don't exist or haven't had time to be replicated in one's country. Then that country cannot be on the cutting edge of new technology simply because they penalize buying from international companies.

It would be an advantage to local companies - yes! At the moment, local companies are often at a disadvantage because they're paying more tax than those companies who are legally based overseas. If the product or service doesn't exist locally, then the purchasing company will indeed need to pay tax, if and only if it's local sales are greater than local costs. If buying this overseas service such as AWS hosting gives…

This is one of those things that sounds great on paper but in practice basically kills any chance of a startup environment in the country. Why would a startup wish to grow in such a nation if there are other places where the ability to buy useful services from other international companies are so much cheaper?
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