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

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

#241

Post by nybble41 »

tonyedgecombe wrote: post #159
tim333 wrote: post #93

Earlier quoted context omitted.

Zero corporate tax would lead to a lot of avoidance and drops in government revenue. Say you are a consultant earning 100k a year who owns a house. You could just pay the 100k to your company and borrow against the house for living costs and pay zero tax for the time being.

You could do this now, leave your profits in the corporation and borrow against the balance. I don't think it would work though, compound interest accumulating on the loan would soon eat the gains.

So don't let the interest accumulate. Taxes on the income needed to cover the interest wouldn't be all that high compared to taxes on the full amount of the loan. Or the loan can just be interest-free, but then you pay tax on the foregone interest as if it were income.

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

#242

Post by [deleted] »

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…

[deleted]

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

#243

Post by pasabagi »

sokoloff wrote: post #238
ddalex wrote: post #195

Earlier quoted context omitted.

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?”

Is a company that doesn't pay taxes actually useful?

I would have thought it would out-compete companies that actually do pay taxes, so it would reduce revenue (presumably) without increasing job numbers.

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

#244

Post by president »

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, 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.

This is a very naive and unrealistic take. In a world where nations like Russia and China are willing to play dirty to encroach on western democracies, you cannot simply counter by playing fair. Where do you think the world would be if Allied forces did not resort to spying and influence operations (which were crucial by the way)?

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

#245

Post by sokoloff »

pasabagi wrote: post #243
sokoloff wrote: post #238

Earlier quoted context omitted.

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?”

Is a company that doesn't pay taxes actually useful? I would have thought it would out-compete companies that actually do pay taxes, so it would reduce revenue (presumably) without increasing job numbers.

It seems extremely strange to me to think that the primary purpose of a company would be to pay income taxes to a country (as seems to be implied by the question of whether they’re useful if they don’t).

A company that doesn’t pay income taxes can still provide useful services to consumers, provide employment and purpose for workers, and those workers will pay income tax and employer will pay payroll taxes.

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

#246

Post by 8bitsrule »

smush wrote: post #148
SirLotsaLocks wrote: post #129

Earlier quoted context omitted.

corporations benifit from state funded systems, so they should give back to the state. The state funds the streets they drive on, the internet they use computers first created by the government, they use are defended by copyright LAW that the government made to protect companies from copycats, they use money regulated by the government, they use employees that were educated (mostly) by the governemnt, smaller compani…

> we need to crack down on tax evasion Corporations, small businesses, private citizens all benefit from state funded systems. That's part of the point of having a state in the first place. It could be seen as hyperbolic to conflate paying the minimum legal amounts with tax evasion. Corporations pay payroll taxes, VAT in relevant countries, capital gains, etc. as required by law. Whether our laws have large wiggle-ro…

>as required by law

Until they lobby/'donate' for laws (and enforcement) to be relaxed. Which continues to very very effective. So effective that campaign-finance-reform is still outside of all public discussion.

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

#247

Post by tim333 »

jhall1468 wrote: post #237
tim333 wrote: post #121

Earlier quoted context omitted.

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.

On example under UK law is if you work abroad for a year and deemed non UK tax resident then you could receive income tax free during that period. The K2 scheme that Jimmy Carr took part in got a lot of coverage https://en.wikipedia.org/wiki/K2_(tax_scheme)

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

#248

Post by tim333 »

sbacic wrote: post #165
tim333 wrote: post #141

Earlier quoted context omitted.

There are currently a lot of ways for multinational companies to reduce their tax burden to near zero by for example Microsoft allocating most of their European profits to a DVD stamping plant in Ireland which had a near zero rate at the time. Also they are kind of expected to maximise shareholder value by taking advantage of such legal avoidance schemes. The proper way to stop this is for counties to make anti avoid…

> The proper way to stop this is for counties to make anti avoidance laws. You mean tax evasion, not tax avoidance, right? Last time I checked, avoidance was legal, evasion was not. If you actually did mean tax avoidance, then I must point out how dangerous the idea of somebody arbitrarily deciding what _legal_ option is okay or isn't okay on a case by case basis. I'd much rather have some things reclassified as tax…

By anti avoidance laws I mean laws to prevent the legal avoidance by some means. For example to prevent Microsoft allocating its profits to a DVD stamping plant in a tax haven you could make a law requiring the taxes to be paid where most value was created or some such.

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

#249

Post by bluecalm »

kgwgk wrote: post #236
bluecalm wrote: post #192

Earlier quoted context omitted.

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).

Yes, the same way if suddenly raw materials got more expensive. The prices would increase and the companies would make less money as fewer people would be buying. That is assuming the price before the cost increase or VAT was set at a point to maximize profits.

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

#250

Post by pjc50 »

thu2111 wrote: post #196
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%.

normal UK businesses have to pay more like 30% of their income in tax UK corporation tax rate is 19%. USA corporation tax rate is 21%. Pushed down partly due to low tax competition from the rest of the world, i.e. places like the UK. Facebook pay little corporation tax in the UK because it isn't a British company. It's an American company. It was created in America. Most of its employees are there. Its headquarters a…

Facebook may be listed and headquartered in the US, but it's actually lots of companies, like most multinationals.

Facebook customers in Europe pay Facebook Ireland, who are subject to 12.5% corporation tax. Facebook Ireland in turn pays "licensing" fees to Facebook Cayman Islands, where there is no corporation tax and high bank secrecy.

Remember the Vodafone tax scandal? You might think that as a predominantly British company (spinoff of Racal in the 80s) listed in the uk, they ought to pay tax on the UK profits. Instead most of the profits appear in Luxembourg.

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