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Germany approves global minimum corporate tax

reuters.com

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Re: Germany approves global minimum corporate tax

#41

Post by megasteel32 »

User23 wrote: post #4

The most interesting part to me is that Germany is attempting to tax worldwide income. The USA does this of course, although there are tax treaties that can reduce US taxes on some foreign earnings. The USA can get away with this because most companies simply can’t exit the US so there will be assets to seize and so on. On the other hand Amazon or Google or even Apple could just nope out of Germany and preserve their…

it isn't just Germany, it's all of the EU who are supposed to pass their own laws by the end of the year

Re: Germany approves global minimum corporate tax

#42

Post by alphanullmeric »

perryizgr8 wrote: post #15

I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually. I don't think these additional taxes make any sense along with a personal income tax. It should be one or the other.

It should be neither. Taxes should be a service fee proportional to your usage of a government service. Income shouldn’t even be part of the equation. The USPS charges more if you want to ship heavier packages, not if you get a raise. Personal vs corporate is irrelevant. Pay your fair share.

Re: Germany approves global minimum corporate tax

#43

Post by [deleted] »

richdougherty wrote: post #31
generic92034 wrote: post #26

Earlier quoted context omitted.

Well, wouldn't they have a hard time finding suitable markets, if about every large market adopts those taxes? The USA already has them. It is an OECD initiative.

Just speculating, but perhaps share prices would drop until the returns per dollar invested recovers to the desired level. So it might be like a one off shock to investors who hold shares now, since the new equilibrium has shares priced lower to get the same returns as before the tax.

[deleted]

Re: Germany approves global minimum corporate tax

#44

Post by dmitrygr »

Eddy_Viscosity2 wrote: post #35
User23 wrote: post #4

The most interesting part to me is that Germany is attempting to tax worldwide income. The USA does this of course, although there are tax treaties that can reduce US taxes on some foreign earnings. The USA can get away with this because most companies simply can’t exit the US so there will be assets to seize and so on. On the other hand Amazon or Google or even Apple could just nope out of Germany and preserve their…

I think Amazon and Apple noping out of Germany and EU would be a huge opportunity for new businesses to get a foothold. It would be great to get some competition back in the marketplace.

I keep hearing “this is an huge opportunity” on every such discussion, and I keep wondering if people who say this are delusional or just clueless. You are NOT going to just magically get a new mobile os and a hardware maker from this. That is the sort of thing that needs billions in capital and a decade of work. Nobody will invest that, cause with Apple gone, the politicians who “took our iPhones away from us - their constituents” will be gone soon, and then so will the law. Thus there won’t BE a decade to develop a euroPhone and euroPhoneOS. And people who’d invest billions know all this. And won’t waste the billions…

Re: Germany approves global minimum corporate tax

#45

Post by freefaler »

It'll still be possible to game that system because there information needed to enforce it should be given by the company itself.

The game of where to put the profit and where to put the loss by big corporation with multiple companies registered around the world is the way effective taxes are lowered now. Apple has been doing that for years and the bigger the company the easier is to do it.

The easiest way to avoid paying this is to shift the profits to another "consulting", "licensing", "distribution" deal. You pay this company almost all your profit and put the expenses in your P&L. Now you need to pay the tax only to what you've chosen to pay. Even with GAAP standards there are ways to do it. The "transfer pricing" quagmire exists for a reason, it's almost impossible to claim that this/that "licensing" deal isn't priced properly.

It looks like this is a populist move to claim "we're taxing the rich", but it won't work as expected unless all the information from all the countries goes into 1 centralized place to be analysed. In Germany there is lot's of bad decisions and this is one of them. (like the one to shut down their reactors and burn coal instead).

Re: Germany approves global minimum corporate tax

#46

Post by Eddy_Viscosity2 »

dmitrygr wrote: post #44
Eddy_Viscosity2 wrote: post #35

Earlier quoted context omitted.

I think Amazon and Apple noping out of Germany and EU would be a huge opportunity for new businesses to get a foothold. It would be great to get some competition back in the marketplace.

I keep hearing “this is an huge opportunity” on every such discussion, and I keep wondering if people who say this are delusional or just clueless. You are NOT going to just magically get a new mobile os and a hardware maker from this. That is the sort of thing that needs billions in capital and a decade of work. Nobody will invest that, cause with Apple gone, the politicians who “took our iPhones away from us - thei…

Maybe. It could just mean that other players adapt to the new laws and eat their lunch because even if the profits made with the new laws may become less on a percentage basis, there is still a sh*t-ton of money on the table.

Also, I'd still rather this than the policy of 'let the big corporations do whatever they want and don't pass laws they don't like'.

Re: Germany approves global minimum corporate tax

#47

Post by perryizgr8 »

alphanullmeric wrote: post #42
perryizgr8 wrote: post #15

I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually. I don't think these additional taxes make any sense along with a personal income tax. It should be one or the other.

It should be neither. Taxes should be a service fee proportional to your usage of a government service. Income shouldn’t even be part of the equation. The USPS charges more if you want to ship heavier packages, not if you get a raise. Personal vs corporate is irrelevant. Pay your fair share.

100% agreed, but that is too radical for most people. So I don't start with that :D

Re: Germany approves global minimum corporate tax

#48

Post by howrar »

alphanullmeric wrote: post #42
perryizgr8 wrote: post #15

I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually. I don't think these additional taxes make any sense along with a personal income tax. It should be one or the other.

It should be neither. Taxes should be a service fee proportional to your usage of a government service. Income shouldn’t even be part of the equation. The USPS charges more if you want to ship heavier packages, not if you get a raise. Personal vs corporate is irrelevant. Pay your fair share.

That works for things that only benefit the person directly using the service, and shipping packages would probably be one of those. It doesn't work if you get indirect benefits from other people using the service. For example, how would you quantify how much you use of, say, a government funded mental healthcare system when your neighbour uses it to get a handle on their life and stop flinging garbage over your fence every evening? Or of law enforcement apprehending a burglar a few blocks away who may or may not target your home next if they were left to their own devices?

Re: Germany approves global minimum corporate tax

#49

Post by alphanullmeric »

howrar wrote: post #48
alphanullmeric wrote: post #42

Earlier quoted context omitted.

It should be neither. Taxes should be a service fee proportional to your usage of a government service. Income shouldn’t even be part of the equation. The USPS charges more if you want to ship heavier packages, not if you get a raise. Personal vs corporate is irrelevant. Pay your fair share.

That works for things that only benefit the person directly using the service, and shipping packages would probably be one of those. It doesn't work if you get indirect benefits from other people using the service. For example, how would you quantify how much you use of, say, a government funded mental healthcare system when your neighbour uses it to get a handle on their life and stop flinging garbage over your fenc…

That’s correct, you pay for what you use and don’t pay for what you don’t. It’s irrelevant as to how much something someone else chose to do benefitted me. My lemonade stand doesn’t owe the cinema you decided to open up next to me any money. The only case where you ever have a right to force me to pay you is if we both voluntarily entered an agreement to transact. The “indirect” talking point is something some people like to say so that they can arbitrarily increase someone else’s tax burden by claiming they benefited from an infinite list of things without needing to quantify anything. Simultaneously they can arbitrarily decrease their own tax burden by choosing a threshold of income above their own at which they decide these “indirect benefits” come into play. I’m not interested in that argument. Pay your fair share.

Re: Germany approves global minimum corporate tax

#50

Post by howrar »

alphanullmeric wrote: post #49
howrar wrote: post #48

Earlier quoted context omitted.

That works for things that only benefit the person directly using the service, and shipping packages would probably be one of those. It doesn't work if you get indirect benefits from other people using the service. For example, how would you quantify how much you use of, say, a government funded mental healthcare system when your neighbour uses it to get a handle on their life and stop flinging garbage over your fenc…

That’s correct, you pay for what you use and don’t pay for what you don’t. It’s irrelevant as to how much something someone else chose to do benefitted me. My lemonade stand doesn’t owe the cinema you decided to open up next to me any money. The only case where you ever have a right to force me to pay you is if we both voluntarily entered an agreement to transact. The “indirect” talking point is something some people…

> My lemonade stand doesn’t owe the cinema you decided to open up next to me any money.

Generally, if a private cinema opens up and stays open, it's because they've determined that they profit enough from their direct patronage that it's worthwhile. Since there's already enough incentive in place for this cinema to exist, I don't think it's necessary to get surrounding businesses to fund them. Although in an ideal world, they should get something for indirect improvements to surrounding businesses, but the issue is that there's no way to actually quantify how much benefit you get from it. The current system works well enough in this case.

On the other hand, if you open up a cinema that operates at a loss while propping up surrounding businesses by bringing people in, then your lemonade stand definitely owes them. If you have two competing lemonade stands in the area that only exist because of that cinema and one of them decides to fund the cinema to keep it running, then it increases operational expenses for that one lemonade stand, allowing the other to outcompete. It's a prisoner's dilemma problem. Everyone paying means everyone wins, while if one person doesn't pay, then they win regardless of what everyone else does. Pay your fair share.

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