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Spain planning on going ahead with ‘Google tax’ despite US tariff threats

elpais.com

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Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#231

Post by ensignavenger »

mcv wrote: post #219
ensignavenger wrote: post #205

Earlier quoted context omitted.

So if I setup a company to do research and development in Spain, and spend $100 billion dollars creating a breakthrough technology, then I license my breakthrough technology to Americans for $1 billion dollars per year, America should be taxing my $1 billion per year in revenue as if it were 100% profit because I don't have any expenses in America?

Yeah. You already deduct your costs in Spain from your profits there. If you don't do any business in Spain, why are you there? The idea here is to discourage corporations from putting basing in tax havens where they don't do any business. Taxes are paid where the profit is made.

Maybe I am in Spain because I am a Spanish citizen? Maybe I want to do R&D there because that is where the expertise is that I need? Maybe I thought my tech was going to be much more successful in Spain when I set it all up, but found out that the market wasn't there but was in the US?

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#232

Post by pvaldes »

qxnqd wrote: post #8
romanovcode wrote: post #7

Earlier quoted context omitted.

It's not about the money - it's about sending the message. No pun intended.

[flagged]

> They are socialists so they don't care if blue collar workers suffer

Elmundo newspaper is a liberal oriented newspaper and they have their audience. Trying to milk the maximum level of outrage about anything done by evil socialists is expected for they.

Thus, take in mind that the real situation could be (and probably will be) a little less melodramatic. Some of their journalists and their director have been fined for spreading difamatory, partial or even faked news in the past.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#233

Post by natalyarostova »

dangerface wrote: post #60
vector_rotcev wrote: post #32

As a non-economist (amateur or professional), I get the impression that countries are losing their concern of the repercussions of displeasing the USA economically. Is this an accurate interpretation? If so, is it that they're less fearful of reprisals (tariffs?) or that they're less confident in the benefits of cooperation with the USA? Or a mix? Or something else?

Europeans like me like America because they are very vocal about freedom and liberty but we are waking up to the reality that it's all talk. The USA behaves like Russia and China, they spy on foreigners, influence their elections, start unjustified wars for oil and generally have a very low regard for freedom and liberty outside of their soil. USA are not the good guys and Russia and China are not the bad guys they a…

> The USA behaves like Russia and China

It's truly insane how people are so poorly educated on current events, and their magnitudes, outside of polarizing media, that they sincerely believe this is true.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#234

Post by wildmusings »

rtkwe wrote: post #100
seibelj wrote: post #82

IMO the corporate tax rate should be zero, and then everyone would be on the same playing field. Right now the only companies that pay taxes are small ones without the resources and staff to get around it. With 0% corporate tax, all of these games and shenanigans would end. Also, corporate profits are double-taxed anyway, as taxes are paid once on profits then again as dividends / capital gains by the shareholders. T…

"Corporations are dodging taxes lets just throw in the towel and not attempt to do that at all." Also capital gains aren't double taxing corporate profits the benefits are going to two completely different groups of people.

Who does corporate income benefit if not shareholders and employees?

The corporation can deduct the wages it pays employees, which is why they’re fully taxed at the individual earned-income level—this is the personal income tax. In theory, the corporate tax takes a cut of profits (i.e. what is due to the shareholders), so the capital gains tax is lower to make up for it. The problem is that the corporate tax is too easy to legally avoid for large sophisticated corporations, an almost impossible problem to solve within the international system. The solution is to just abolish it and tax capital gains at the same rate as earned-income.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#236

Post by kgwgk »

bluecalm wrote: post #192
the-dude wrote: post #42

Earlier quoted context omitted.

The customer pays the VAT. Google collects it and returns it to the government.

It's a moot point who "pays". The tax is added to the transaction which means less profit for the company. I pay VAT. I can sell my product for X. Just because I need to add VAT doesn't mean I can magically sell for X +23% because people wouldn't buy it. The price is set by demand/supply. Paying VAT means the company makes less profit. I send the VAT money to my government every month. If I didn't have to do that it…

> If I didn't have to do that it would be my profit.

If your competitors didn’t have to do that either there would be pressure on prices and a new price would be set by demand/supply.

When VAT changes (usually increasing) if doesn’t just affect profits. It also affects prices (to what extent and how rapidly depends on many factors).

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#237

Post by jhall1468 »

tim333 wrote: post #121
rb808 wrote: post #96

Earlier quoted context omitted.

Right but eventually they money has to get from the company to the consultant - either dividends or wages. Either way it'll be taxed.

Yeah maybe eventually. Though people try to find loopholes eg. move abroad, transfer the money offshore, lend the money to the consultant from the company rather than paying him or her, send the money to a company owned by an opaque offshore trust and so on. Big industries spring up to facilitate the avoidance that lobby politicians to allow the loopholes and so on. It can get kind of messy.

Literally everything you mentioned isn't a loophole, it's tax fraud. Tax loopholes are what they do within a single jurisdiction to avoid taxes. What you're suggesting is transferring money from one jurisdiction to another, which can't be done tax-free.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#238

Post by sokoloff »

ddalex wrote: post #195
seibelj wrote: post #82

IMO the corporate tax rate should be zero, and then everyone would be on the same playing field. Right now the only companies that pay taxes are small ones without the resources and staff to get around it. With 0% corporate tax, all of these games and shenanigans would end. Also, corporate profits are double-taxed anyway, as taxes are paid once on profits then again as dividends / capital gains by the shareholders. T…

Agreed with the need to have a uniform corporate tax, but not 0 - it must be higher than personal tax, otherwise you just create a new loophole. I'd say either 20% or profit or 2% of turnover, whichever is higher. Before dividends and stock buybacks. The corporations need to sustain the social infrastructure that made them possible in the first place.

The problem with “it needs to be uniform and higher than 0” is that another sovereign country would have great incentive to set their tax rate at a fraction of yours. Income would then flow towards being recognized in that country.

You might call them a “defector”. Others might say “well, they’re sovereign and what does that mean if not determining how to set their national tax policies?”

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#239

Post by jhall1468 »

ddalex wrote: post #195
seibelj wrote: post #82

IMO the corporate tax rate should be zero, and then everyone would be on the same playing field. Right now the only companies that pay taxes are small ones without the resources and staff to get around it. With 0% corporate tax, all of these games and shenanigans would end. Also, corporate profits are double-taxed anyway, as taxes are paid once on profits then again as dividends / capital gains by the shareholders. T…

Agreed with the need to have a uniform corporate tax, but not 0 - it must be higher than personal tax, otherwise you just create a new loophole. I'd say either 20% or profit or 2% of turnover, whichever is higher. Before dividends and stock buybacks. The corporations need to sustain the social infrastructure that made them possible in the first place.

You can't tax revenue when the business is losing money. No country in the world does that for a reason.

Re: Spain planning on going ahead with ‘Google tax’ despite US tariff threats

#240

Post by the_watcher »

tim333 wrote: post #71

I'm not sure of the details of Spain's proposal but something needs to be done really to make taxation more fair. At the moment you get headlines like "Facebook paid just £28m tax after record £1.6bn revenues in UK" because they fiddle it with offshore tax havens while normal UK businesses have to pay more like 30% of their income in tax, not 1.7%.

> "Facebook paid just £28m tax after record £1.6bn revenues in UK" because they fiddle it with offshore tax havens while normal UK businesses have to pay more like 30% of their income in tax, not 1.7%.

This conflates a few things. As I'm an American, I'm going to speak about US tax law, but concept should be applicable. No normal US business is paying taxes on their _revenues_, they're paying taxes on their earnings (profit, roughly speaking). So if you made $1B in revenue selling $1 bills for $0.50, you'd have lost $500M and not have to pay taxes on top of that.

The point about fiddling with where revenue is accrued to impact tax rates is true, but the more accurate way to phrase it would be "FB paid only $X in taxes after record $XXX earnings in the UK". This isn't always as simple to derive, but you could back into an estimation of it by taking revenue from UK businesses and subtracting UK headcount and purchases made in the UK or from UK businesses. The tax number they'd owe is definitely higher (and there's a very strong argument that they should pay this rate), but it's not anywhere near "corporate tax rate * revenue in country" (or worse, global revenue).

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