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Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

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Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#271

Post by stale2002 »

zdkl wrote: post #209
adventured wrote: post #197

Earlier quoted context omitted.

> The best thing about this proposal is that it sets up a harmonious relationship It does the exact opposite. It spurs a further acrimonious relationship between the major economies of the EU and the US. Particularly France and Germany, which are a combined outsized share of the EU economy and represent ~80% of the trade deficit that the US has with the EU. This new tariff exists solely because the EU can't compete o…

>This new tariff exists solely because the EU can't compete on technology and needs to raise barriers. I'd argue it's a shield against unfair competition. US tech companies have a huge first mover advantage. They use that advantage to attract foreign talent and employ that talent to extract value globally. It seems reasonable to expect a financial contribution for access to foreign markets given the quasi monopolisti…

The alternative is that maybe the EU needs to move first more often?

Why are they so far behind that they aren't ever the first?

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#272

Post by stale2002 »

cryptoz wrote: post #44
cromwellian wrote: post #37

Earlier quoted context omitted.

People are up in arms about China as well, and IMHO, the US and EU should take them to the WTO over unfair trade practices. But stop focusing on Google for a moment, and consider poor Twitter. Can they really afford this tax? If you're already losing money, or breaking even, why should you have to pay taxes on $$$/user earned in the US or Japan?

> consider poor Twitter. Can they really afford this tax? If they can't afford a simple tax on their business in a region then they shouldn't be doing business there or at all. What do you mean, "poor Twitter"? It's not a person. It doesn't have emotions or feelings. We don't need to treat it like a poor little snowflake and make sure it never melts. If Twitter can't handle being taxed then Twitter should die. That's…

> If Twitter can't handle being taxed then Twitter should die. That's capitalism.

Alternatively, the US could create retaliatory trade tariffs against these countries.

Let the trade wars being. I wonder who will come out on top.

Or even better, some of these tech companies could simply ban all users from these countries and point to the new tariff as to why.

I wonder how much those voting citizens would like it if they lost access to the most popular social networks, ect for a couple days?

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#273

Post by joejerryronnie »

felipeko wrote: post #269
joejerryronnie wrote: post #264

Earlier quoted context omitted.

How is this strategy working for OPEC?

Can you elaborate on that? I'm not sure how this is comparable. Ireland's low tax works for Ireland because it has no competition, so it gets the "market" all to itself. If competition arrived, Ireland would have no option but to raise taxes to make it up for it - as it needs this funds. It would essentially force Ireland's hand on this issue. On the OPEC side they have external and internal competition. Sometimes th…

Admittedly, my reply was lacking necessary detail. The parallel I was trying to draw with OPEC is that, in order for a cartel to work effectively, each member has to adhere to the rules established by the cartel, sometimes to the short-term detriment of any individual cartel member. With OPEC, this means strict controls on the output of oil. In good times, each member seems to keep production in line with the OPEC established standards, but the minute any stress is added to the system (primarily dropping oil prices), all bets are off and we see individual members increasing their production to maintain short-term cash flow - you essentially said this same thing in your comment.

It seems like your proposal would establish a cartel-like structure related to corporate tax rates. I was trying to point out the inherent fragility of this type of arraignment, especially in the EU where there are many stressors between member countries.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#274

Post by Eridrus »

electricEmu wrote: post #258
prepend wrote: post #249

Earlier quoted context omitted.

Actually, this is what “free trade” is exactly. No import tariffs between most EU/US trade. Similarly to what OP said, since this tax disproportionately affects US companies doing business in EU, the US is likely to add a torrid to EU exports to the US. And the argument “You don’t just roll into a country, export billions of dollars of cars (or whatever), and expect...”

The accounting is setup to selectively avoid paying taxes in certain countries. That's free trade. It's also shady and selective to avoid paying taxes for infrastructure the company uses. That's kind of screwed up.

Despite the fact that these companies are putting headquarters in Ireland, it's actually US taxes that they're seeking to minimize, so it's not really the EU's place to collect them here. With the new UA corporate tax law changes for international income I expect fewer US companies to build HQ in Ireland. Though being domiciled in Ireland also makes the Ireland Data protection Authority their primary point of contact too.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#275

Post by dorgo »

kgwgk wrote: post #242
3pt14159 wrote: post #236

Earlier quoted context omitted.

I have yet to talk to someone that can explain to me why a VAT wouldn't be better. We already know how VATs work, they're already fair, they already handle low-margin companies very well. Why bother with a revenue tax? It heavily stilts the game in favour of bigger players because it encourages vertical integration. I agree that our largest tech companies are already too powerful and need to have a higher tax burden…

There is already a VAT! This will come on top of it.

I guess he proposes to increase the VAT for big players instead of creating an all new form of taxation.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#276

Post by gsnedders »

cromwellian wrote: post #42
toomuchtodo wrote: post #24

Earlier quoted context omitted.

> If a company doesn't have offices in your country, it's not yours. Google has offices in almost every EU country. https://careers.google.com/locations/ Aarhus, Amsterdam, Athens, Berlin, Bratislava, Brussels, Budapest, Copenhagen, Dublin (EU HQ), Eemshaven, Frankfurt, Hamburg, Hamina, Helsinki, Lisbon, London, Lubeck, Madrid, Milan, Moscow, Munich, Oslo, Paris. Prague, Rome, Saint-Ghislain, Stockholm, Vienna, Warsa…

Those are mostly sales offices, not corporate HQ. Do sales offices need to physically exist locally for internet service sales? Something to ponder.

The majority of those offices have more software engineers than sales people, AFAIK.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#277

Post by felipeko »

joejerryronnie wrote: post #273
felipeko wrote: post #269

Earlier quoted context omitted.

Can you elaborate on that? I'm not sure how this is comparable. Ireland's low tax works for Ireland because it has no competition, so it gets the "market" all to itself. If competition arrived, Ireland would have no option but to raise taxes to make it up for it - as it needs this funds. It would essentially force Ireland's hand on this issue. On the OPEC side they have external and internal competition. Sometimes th…

Admittedly, my reply was lacking necessary detail. The parallel I was trying to draw with OPEC is that, in order for a cartel to work effectively, each member has to adhere to the rules established by the cartel, sometimes to the short-term detriment of any individual cartel member. With OPEC, this means strict controls on the output of oil. In good times, each member seems to keep production in line with the OPEC es…

Thanks, I see the similarities now.

I think the system will work only as far as you have power players that are able to punish everyone who gets out of line - by racing to the bottom and driving profits out as a punishment [1].

That's exactly what I think complaining countries should do. They're not getting any revenue now, so they are able to power play Ireland into fair taxation, and the system will be as stable as their possibility to do so. If you take into account that any country cheating will take revenue away from others (thus their reason for a high tax), they should always be able to counter, as they are now.

[1] https://www.nytimes.com/1988/11/03/business/saudis-use-pain-...

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#278

Post by zygimantasdev »

dollar wrote: post #266

It sure would be fun if Google, Facebook, Twitter collectively shut off EU users on the day this tax went into effect.

As EU citizen I wouldn't mind. If these corps decide its not profitable for them - for sure an alternative will pop. (Currently using two of those services)

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#279

Post by jackvalentine »

jimmywanger wrote: post #218
jackvalentine wrote: post #163

Earlier quoted context omitted.

So if you're using the legal or perceptional advantages of trading "out" of Australia (or the UK, or wherever)... why shouldn't you be subject to laws, including tax laws, there?

That is what the VAT, customs, and personal income tax is for. It's relatively easy to keep track of just where money comes from for a purchase, and where stuff is delivered. If you actually reside there and use the services that's one thing - and you can tax the purchase for the purchaser. Taxing sources is far harder, and virtually impossible for virtual goods. Should we tax CNDs for a percentage of Netflix and Ama…

I genuinely don’t see how you find this so confusing and you’re using wildly disparate examples that don’t all make the same point. I’m not interested in taking part in this outrage feat.

Re: Tech Giants Set to Face 3% Tax on Revenue Under New EU Plan

#280

Post by DenisM »

3pt14159 wrote: post #238
DenisM wrote: post #221

The state of Washington has a very similar concept: Business and Occupation tax. If you have nexus you pay taxes on local revenue. That’s in addition to the sales tax. The tax rates vary by industry, mostly a fraction of a percent. I don’t know how successful the giants are in dodging taxes though. Perhaps they are trying to setup “independent” out of state entities that handle all of the sales. There is also a trend…

What is "nexus" in this context? The frequent traveler program?

No, sorry.

[...] Nexus, also called “sufficient physical presence,” is a legal term that refers to the requirement for companies doing business in a state to collect and pay tax on sales in that state. [....]

https://quickbooks.intuit.com/r/taxes/what-is-nexus-and-how-...

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