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France Plans 5% Digital Tax as Governments Chase Internet Giants

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

#211

Post by adventured »

thoughtstheseus wrote: post #165
hanniabu wrote: post #147

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 taxes are extraordinarily regressive. Next to lowering taxes on the rich, it's among the worst possible options.

Increasing the income tax and taxing capital gains at regular income rates, along with bolstering estate taxes on the rich, are the ideal near-term solutions to the US budget problem. The US still has a lot of slack taxing capacity on the wealthy. That should be maxed out long before we look at a VAT.

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

#212

Post by Mirioron »

iguy wrote: post #136
yann63 wrote: post #120

Earlier quoted context omitted.

Thanks a lot to all your answers. My question was badly formulated. I meant to ask: why are we tolerating this situation? Regardless of tax evasion / tax optimization or whatever is the wording, most people agree that these companies are not paying the amount of taxes they should. I get the why and how these companies are doing this. I just don't understand why we, as a society, accept that. Our society has never bee…

> most people agree that these companies are not paying the amount of taxes they should They will say this because the news tells them this is true. But it seems far from obvious to me. If a multinational sets up shop in France, then a whole pile of taxes do get paid: VAT is 20% of all sales. Then there is income tax / social security / etc. I don't know any French details, but I'm quite sure it's above 30% in total.…

Yeah, I find that the tax avoidance issue is overblown. The numbers look large because they have collected over several years, but in the grand scheme of things they're a cup in the bucket compared to VAT, payroll and income taxes.

You have to remember that VAT, payroll, and income taxes roughly scale with revenue, but corporate taxes scale with profits.

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

#213

Post by fauigerzigerk »

Mirioron wrote: post #207
fauigerzigerk wrote: post #181

Earlier quoted context omitted.

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.

I get why everyone (me included) wants money. But if every government comes up with its own inconsistent ad hoc scheme to tax foreign corporations then they will unleash the mother of all trade wars.

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

#214

Post by sbacic »

bobl wrote: post #122
sbacic wrote: post #105

Earlier quoted context omitted.

As a European, I feel like the EU, in general, is on the losing side of globalization. There is not a single European internet company in the top 15. I think part of the reason for this is cultural (aversion to risk), part of it is due to the environment (relatively low salaries for IT, limited access to venture capital) and a part of it is due to bad policies being enacted by the EU - most notably the EU VAT on digi…

> [...] and a part of it is due to bad policies being enacted by the EU - most notably the EU VAT on digital services, the GDPR and now the Copyright directive. These rules came into effect the last year or so, the "battle" for the tech industry was fought ten to twenty years ago. US companies all have had a huge advantage "only" being under the (at the time very criticized) DMCA while European companies had to abide…

The VAT directive on digital goods most certainly did not come into effect in the last year or so.

> US companies all have had a huge advantage "only" being under the (at the time very criticized) DMCA while European companies had to abide by local laws, often in multiple jurisdictions.

So we agree that Europe, in general, is a worse startup environment compared to the USA?

Also, I think it's pretty disingenuous to claim that large companies like Apple or Microsoft got big because they didn't pay taxes in Europe.

> Any of these companies could have been really big domestically, if it wasn't for it being hard to grow and easy to get bought.

They were big domestically. They were even significant internationally. Just not nearly enough to match US companies.

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

#215

Post by T2_t2 »

sparkie wrote: post #183
infinity0 wrote: post #152

Earlier quoted context omitted.

why are corporations such parasites? benefiting from the citizens in a country like France that are supported by its social services and infrastructure like roads, healthcare, a justice system that prevents the corporation's property from being stolen, but not contributing their fair share of the tax back and even arrogantly denying that they are benefiting from the infrastructure that they are taking advantage of fo…

A corporation is a person, but it's a legal fiction. The corporation is simply a gathering of non fictitious people who come together to collaborate and earn revenue as a collective. Each of those people pays taxes from their salaries like anyone else - they pay their fair share. So what is a tax levied on a corporation? It's simply an additional tax levied on the human people who make up the corporation. They're alr…

Depends on the tax code. In Australia, corporate taxes are passed down as a deduction to real humans. So if I get a fully franked dividend (fully franked means the company paid the 30% company tax) of $70, I also get a tax credit for $30. If my marginal rate is > 30%, I pay the difference (e.g. 50% means I owe $20) but if it is lower I get a refund - the marginal rate is 19% up to $37K, so those people would get a refund of $11.

This seems to me a sensible law, as doesn't double dip, and foreign owners don't get the credit, so the government does get a smidge more revenue, while not F$%^ing over their citizens.

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

#216

Post by T2_t2 »

Nimitz14 wrote: post #159
throwaway_9168 wrote: post #113

Earlier quoted context omitted.

>> Sounds pretty great to me. I see. Do you mind spending another 5 and tell the answer to this question: suppose someone sells online courses. And they don't themselves reside in the EU, but the have customers who do. Should they register for VAT?

What do you mean "should they register for VAT"? You should be registering for VAT in your home country anyways. Or are you talking about additionally registering for VAT MOSS? The answer is no you don't have to, it's just convenient because it's less admin (as otherwise you should be registering for VAT in each EU country that you have customers). I knew all that from the previous 5 minutes I spent on it.

All this stuff is super confusing. https://www.austrade.gov.au/contact/faqs/i-want-to-export-my... says you need to register if: > your VAT taxable turnover is more than £85,000 (the 'threshold') in a 12 month period > you expect to go over the threshold in a single 30 day period

WTF? How the hell would anyone know that? What if you never sell to the UK, but someone goes on a run because some product randomly becomes popular. It is such an unnecessary minefield.

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

#217

Post by infinity0 »

sparkie wrote: post #205
infinity0 wrote: post #196

Earlier quoted context omitted.

> 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 nee…

> A corporation has to provide services people want to use of their own volition. A government takes money off people without asking. [..] Ultimately, they rely on that monopoly of force [..]

Distinguishing having a de-jure monopoly on force vs a de-facto monopoly on something else is not a useful practical difference to make. Other quantitative aspects of the relationship are more important to the analysis, and you pointed out some of them yourself.

This artificial elevation of this "monopoly on force" pollutes other aspects of your analysis of reality, leading you to say things like "If you're just a lowly employee [..] you might think it doesn't matter to you" apparently without irony.

In some sense, a government does take money from me without asking. In some other sense, this relationship is consensual - individuals with more resources/power are free to move to the jurisdiction of a different government. Similarly, the degree to which some corporations "take" money from people depends on the circumstances. People have to live somewhere, eat something, etc, and this has a big influence on the corporations they must give their wealth to. So distinguishing governments from corporations is not particularly meaningful or interesting, and leads you to artificially exonerate some bad activities of corporations whilst incriminating some good activities of governments.

edit:

> Most land is privately owned, not by governments.

I changed to "physical control" because it was more relevant. Even "ownership" is a (very convincing) "legal fiction" whose power derives from the government's control over that land. If it were not able to maintain this control, another country could invade it. If you were able to actually control the land that you "own", then sure I might have to pay you taxes in order to live on it (or move somewhere else with better tax conditions).

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

#219

Post by beagle3 »

puzzle wrote: post #52
beagle3 wrote: post #47

Earlier quoted context omitted.

Money collected for services rendered through a French IP. That is, on ads shown to French viewers, on GSuite accounts paid while connected to a French IP address, etc.

The money is collected by Google Ireland. So they're going to charge Google Ireland? It's probably safe to assume they're not charging Google LLC in Delaware.

So what?

If I rent out an apartment in Paris, does it really matter if I collect the money as Pierre Francois, a french resident, or Pierre Francois LLC, a Delaware corporation? It mostly doesn't - I'm bound by French rent law, and pay french taxes related to rent either way (Income is more complicated).

Such a law is very simple: "You pay 5% of ad/media sales for the privilege to send data to french IPs", residence of person/corporation collecting the money not important.

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

#220

Post by readhn »

donatj wrote: post #51
readhn wrote: post #44

Why wont government taxation agencies have tax bounty programs? If you, as a tax professional, find a taxation loophole that allows big businesses to lower their taxes - you get a $$$ compensation and the loophole gets publicized and "officially" patched.

I don’t think knowledge of the loopholes is the issue. It’s reasonable to determine what loopholes were used after the fact. The problem is actually closing them and the political fallout involved.

perhaps the loopholes should be exposed to the general public then so that we can hold the public officials accountable to fix them.
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