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France has approved a digital services tax despite threats of retaliation by US

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Re: France has approved a digital services tax despite threats of retaliation by US

#231

Earlier quoted context omitted.

With that argument, protectionism will incentivise competition. So why don’t we close the economy a bit?

Whether you're /s or not, I wholly agree; I both fully support using public policy, tariffs, and other economic mechanisms to support "at home" companies over those abroad, as well as supporting local labor over that outside the country. If internet companies are the future of the economy (see: Stripe's opinion), why wouldn't you do everything you could as a country to support your own companies?

Because protectionism isn’t only economically bad but also immoral. You can’t force everybody else to pay higher prices.

Supporting your own companies at the expense of the rest of the society isn’t good. You’ll be forcing consumers to pay higher prices for a completely nationalist reason.

No reasonable economist would favor protectionism.

Re: France has approved a digital services tax despite threats of retaliation by US

#232
post #40
post #21

The US administration is presenting the new tax as if it was specifically targeted to US companies because of their origin. Like a tariff. It is not the case at all. Yes the biggest tech giants that do not pay enough tax are mostly from the US (also other companies from other countries are affected too) But it is not because they are from the US that this new tax is created. It is simply because they don't pay enough…

I suppose it's just like how the tax law changes in the US were not designed to hurt high-tax liberal states more than low-tax conservative states, but that the high-tax liberal states were just taking advantage of the standard deduction. Unfortunately in these cases, perception is just as important as the nominal reason.

How can you tell that they weren't? There are always pretexts and blindly trusting face value explanations for a policy is dangerously naive.

Re: France has approved a digital services tax despite threats of retaliation by US

#233
post #178

Earlier quoted context omitted.

Vat isn't paid on the ad space these companies sell to other foreign businesses.

They do though? > https://sellercentral-europe.amazon.com/forums/t/been-charge... > https://sellercentral.amazon.com/gp/help/external/201748700?...

VAT is an interesting one, since Amazon isn't even affected by VAT. It's easy to reduce VAT liability altogether.

This tax is a crude corporate income tax replacement.

Re: France has approved a digital services tax despite threats of retaliation by US

#234
post #119

What happened to a company who has no physical presence in France refuse to pay the tax on the ground that France has no jurisdiction upon them? Ordering French ISPs to block the web service of that company thereby breaking the fundamental human right of freedom of speech and no censorship.

China does that and laughs all the way to the Gulag.

Re: France has approved a digital services tax despite threats of retaliation by US

#235
post #157

Earlier quoted context omitted.

Double Irish with a Dutch Sandwich. Companies like google can charge their profitable branches in other countries royalties to use Google software or platform moving the profits out of a higher tax country like France into Ireland where there's little to no tax. Even after they patched the Dutch part that allowed even the marginal Irish taxes to be avoided companies can still artificially lower their profit by transf…

Has any country explored options for shifting to a revenue tax to eliminate such games entirely?

This tax is exactly that.

Re: France has approved a digital services tax despite threats of retaliation by US

#237
post #32

Earlier quoted context omitted.

All of those can be applied to any company however. By this logic, they should add a +3% tax on every foreign business. None of this is true. It is a protectionist / anti-tax evasion measure primarily. It can be justified considering the threat that amazon poses in local markets

Foreign business which are not internet based pay taxes. Your point is irrelevant.

Foreign businesses that deliver products and services from local branches, without IP value shifting - pay enough taxes to not be a problem.

Re: France has approved a digital services tax despite threats of retaliation by US

#238
post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

I think it comes down to economic warfare. The us abuses it with its allies and thats just retaliation. Herés a video in french explaining it better than i can: https://m.youtube.com/watch?v=dejeVuL9-7c Maybe YT knows how to translate live ? (Nlp + gtranslate ?) My point is: in order to understand this chess move (and judge for yourself whether its a smart one or not), you have to understand the previous moves on the…

> So, they're imposing a tax on companies that serve French customers via the internet but aren't based in France

The Alstom case (and, to a larger extent, the US justice system jurisdictional overreach) was really something ugly, I don't really believe it's even remotely comparable to this situation.

Re: France has approved a digital services tax despite threats of retaliation by US

#239
post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

With respect, you do not understand the logic behind taxes, much less the logic behind taxing international businesses.

> The idea behind taxes is that you use some public resource and you pay for that service

You are framing taxes as if the government is a business selling people health care, fire protection, security, and infrastructure.

I benefit from infrastructure I don't personally use. For example, even if I am a healthy individual, I benefit from healthcare! Healthy people get and keep their jobs, get paid, and spend their money on Netflix, Uber, Lyft, and/or Disney. Lemme look... Yup, Netflix, Uber, Lyft, and Disney are all customers of my employer, who pays me, so I benefit indirectly from Healthcare.

That is one tiny example, but the actual principle behind taxation works this way: Everyone benefits indirectly from a functioning society.

(We sometimes tax people just for the things they use, but generally we do this to limit undesirable "tragedy of the commons" problems. Consumption taxes, vice taxes, and the issue of regressive taxation is outside the scope of this reply.)

The idea behind taxation is that everyone benefits, therefore everyone pays. Now we are talking about a company located outside of a country, benefitting from that country being a functioning economy.

Just as I benefit from infrastructure I don't use because I benefit from my country having a thriving, healthy populace with disposable income, so does the company selling things to the exact same populace.

Now just move this such that we are discussing France instead of Canada, and there is the actual logic: These internet companies benefit from France having a functioning economy with a populace that has disposable income to spend, so they should support that by paying taxes.

In sum, the flaw in your explanation begins with your model for why people and corporations pay taxes in the first place, and how they benefit from those taxes.

Re: France has approved a digital services tax despite threats of retaliation by US

#240

Earlier quoted context omitted.

>I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue. There's nothing arbitrary here, in fact they're attempting to partially address a perverse incentive to take all your business online and do some jurisdiction arbitrage to minimize corporate taxes. This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris tha…

I'm trying to follow the argument in good faith, so bear with me... > This gives you an unfair advantage over, say, a brick-and-mortar store or a physical ad agency in Paris that's trying to compete online. Are you sure it's "an unfair advantage" and not just "an advantage"? Doesn't your position presume that the brick-and-mortar business model deserves special protection? If so, why? If not, what then is unfair abou…

> Are you sure it's "an unfair advantage" and not just "an advantage"?

Having the option to not comply with laws, is an unfair advantage.

>reduce or remove corporate tax and raise sales tax or similar

VAT is a sales tax, effectively, but even that is managed away fairly easy. It's an efficient tax, but when it comes to B2B activity it's effectively unpaid. Amazon, though is a retailer, has a very large amount of B2B business.

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