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Italy Approves ‘Google Tax’ on Internet Companies

bloomberg.com

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Re: Italy Approves ‘Google Tax’ on Internet Companies

#41

Post by mattmanser »

Dylan16807 wrote: post #24
mattmanser wrote: post #19

Earlier quoted context omitted.

I think you're misunderstanding what's going on. Google employs lots of local people in many different countries to sell ads, etc. In order to do so it has national companies that are owned by Google US, but are separate legal entities. But what's happening is the national sales people are closing deals but then book those ads through a different legal entity in Ireland, even though the sale happened with a local sal…

>So what you said, as far as I understand it, makes no sense. Google are based in Italy. There is a small Google there, but they are satellite, not headquarters. (I assume. Perhaps Italy is in the top couple percent and actually does significant things other than sales, then substitute another country here.) >But what's happening is the national sales people are closing deals but then book those ads through a differe…

Um, again, that's not what's happening at all. Perhaps you need to read a bit about it before commenting? Are you American and haven't seen any of the news articles?

It's not that they're selling American ads.

They're selling essentially nation-less 'let's not pay any tax to anyone at all' ads.

They're not paying any tax on this stuff. They're not paying EU tax, they're not paying US tax, they're taking advantage of all the local infrastructures, the laws, the protections from harm, all of which cost the nations a shit load of money to maintain, and not paying a penny.

Just to be clear. On Italian sales, they aren't paying Italy taxes. They're not paying Ireland taxes where they claim the sales are to do a Double Irish. They're not paying Holland taxes where they route the money through to do the Dutch Sandwich. They're not paying the US taxes, they park the money in an offshore account and lobby congress to grant a tax asylum.

They are simply not paying taxes.

This is happening in all the EU countries.

And then every now and then they lobby the US congress for a massive tax holiday to bring the money back to America tax free.

And what really confuses me is that they then often have the cheek to claim that they are contributing to the countries they're scamming because they employ people and those people pay tax, which is disgusting as it's actually the tax of their employees that they're merrily claiming is their contribution!

This is as far as I understand the issue. I think in some places you should probably replace 'not paying' with 'paying a ridiculously small amount'.

Re: Italy Approves ‘Google Tax’ on Internet Companies

#42

Post by chronic25 »

olefoo wrote: post #31
jessedhillon wrote: post #16

Earlier quoted context omitted.

This is a far too simplistic analysis of a multifaceted issue with no single answer. It's the kind of thing I'd expect to hear on Fox.

Yes. I believe it's an artefact of the popularity of the site that that type of comment is becoming more common. We've seen a noticeable increase in trolling and simplistic bias-driven comments over the past year (i.e. comments that suggest that the commenter cannot even conceive why someone might not share their viewpoint).

No.

Re: Italy Approves ‘Google Tax’ on Internet Companies

#43

Post by walshemj »

carlob wrote: post #10

The biggest problem with this law is not its effect on google: the way it's written now forbids any Italian internet user from visualizing ads that were not purchased from an Italian company, and this applies to all websites. So while Google might be forced to comply, most international websites won't, rendering them automatically illegal in Italy, which is probably unenforceable. While I agree with the spirit of mak…

Highly illegal there is meant to be free trade throughout the EU banning a company in another eu jurisdiction form selling ion your country is in theory banned.

Re: Italy Approves ‘Google Tax’ on Internet Companies

#45

Post by ekianjo »

znowi wrote: post #27

Google became too greedy and this is the result of it. I, for one, in support of this law. You can't harvest billions of profit worldwide, then sneak it all through tax heavens and expect it to continue indefinitely. Someone will get weary of this practice. As a thought experiment, imagine the US reaction if Google was an Italian company - making loads of money in the US and paying 0 taxes :)

these tax heavens you mention are totally legal in EU law, and not using them as a company would be seriously stupid. By the way its what the politicians you elect use for their own earnings, to avoid paying taxes as well.

Re: Italy Approves ‘Google Tax’ on Internet Companies

#47

Post by jotm »

raverbashing wrote: post #22
jotm wrote: post #18

How about making the country a better place to start a company instead? You know, so you can attract foreign capital and entrepreneurs, and also reduce the local brain drain. No wonder Italians run to Germany, UK and Ireland to start their companies. Also, good luck enforcing that law.

You'll be surprised about the hassles to open an (Internet) company in Germany. They get the business mostly because they are cheap (and educated workforce, of course)

I don't know from first hand experience, but I've been told that it's relatively easy to open a UG (their version to an LLC/UK LTD) company and start working right away. Hiring and managing employees seems to be the hardest part.

Re: Italy Approves ‘Google Tax’ on Internet Companies

#48

Post by Dylan16807 »

mattmanser wrote: post #41
Dylan16807 wrote: post #24

Earlier quoted context omitted.

>So what you said, as far as I understand it, makes no sense. Google are based in Italy. There is a small Google there, but they are satellite, not headquarters. (I assume. Perhaps Italy is in the top couple percent and actually does significant things other than sales, then substitute another country here.) >But what's happening is the national sales people are closing deals but then book those ads through a differe…

Um, again, that's not what's happening at all. Perhaps you need to read a bit about it before commenting? Are you American and haven't seen any of the news articles? It's not that they're selling American ads. They're selling essentially nation-less 'let's not pay any tax to anyone at all' ads. They're not paying any tax on this stuff. They're not paying EU tax, they're not paying US tax, they're taking advantage of…

>Just to be clear. On Italian sales, they aren't paying Italy taxes. They're not paying Ireland taxes where they claim the sales are to do a Double Irish. They're not paying Holland taxes where they route the money through to do the Dutch Sandwich. They're not paying the US taxes, they park the money in an offshore account and lobby congress to grant a tax asylum.

I know that, and that is a problem. But even if they stopped doing that, Italy could easily see none of the taxes on profit. Italy's new law doesn't actually fix the underlying problem. Instead it's a tariff that somewhat works around the problem but also bans an entire category of inter-country trade, which is quite problematic.

Maybe I wasn't clear enough when I used a hypothetical situation to illustrate why Italy's law is attacking the wrong thing.

Italy's law blocks a German corporation from selling German-served ads on German servers to Italian customers. That's a problem.

Italy's law doesn't block a German corporation from using tax loopholes to never pay anything. Therefore those loopholes shouldn't be mentioned as a justification.

Re: Italy Approves ‘Google Tax’ on Internet Companies

#49

Post by belorn »

mino wrote: post #14
toyg wrote: post #3

Italy: always at the forefront of legislative innovation to kill the internet. Piratebay blocks? Check. Fighting encryption and anonimity? Check. Taxing the crap out of anything that moves? Check. Cutting investments in r&d and universities across thr board? Check. And then they wonder why their economy sucks.

Regarding "piratebay blocks" and, more generically, DNS censorship: recently, RIPE published [1] usage estimations of 8.8.8.8 by country. It is estimated that 12% of Italian internet users has configured 8.8.8.8 on their machine, which I believe is an astonishing high number! I work at an Italian ISP and we ran some statistics ourselves and found that percentage to be around 5%, which is lower but still massive. If y…

> that means a considerable part of tech-savy users are not using their ISP's DNS (which breaks down many kind of things, among which CDNs).

Is every CDN's depended on privileged position inside ISP's? DNS by design is on the edge of the network, and works perfectly fine regardless of who ask the server for a lookup. If the DNS server want to do geo-depended service, they only have to use geo-ip to figure out where a request is coming from and sending the closest geo-located server as answer. You can even do it with http server and redirects.

ISP based dns resolver existed because early networks took time and money to send a single package back and forth from the client to the server. Those economics should not be considered in 2013. Having a third-party doing your dns resolving is like calling the local police office for directions when driving. Antiquated, unnecessary, and not very safe any more for privacy reasons.

Re: Italy Approves ‘Google Tax’ on Internet Companies

#50

Post by Solarsail »

Dylan16807 wrote: post #48
mattmanser wrote: post #41

Earlier quoted context omitted.

Um, again, that's not what's happening at all. Perhaps you need to read a bit about it before commenting? Are you American and haven't seen any of the news articles? It's not that they're selling American ads. They're selling essentially nation-less 'let's not pay any tax to anyone at all' ads. They're not paying any tax on this stuff. They're not paying EU tax, they're not paying US tax, they're taking advantage of…

>Just to be clear. On Italian sales, they aren't paying Italy taxes. They're not paying Ireland taxes where they claim the sales are to do a Double Irish. They're not paying Holland taxes where they route the money through to do the Dutch Sandwich. They're not paying the US taxes, they park the money in an offshore account and lobby congress to grant a tax asylum. I know that, and that is a problem. But even if they…

As far as I can see from this article, this law doesn't block German companies from serving German-served ads from German servers to Italians. It doesn't block anyone else outside Italy from serving any ads from anywhere to Italians. It only blocks Italian companies from using US/German-served ads.
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