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EU lost up to €5.4B in tax revenues from Google, Facebook: report

reuters.com

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Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#51

Post by markvdb »

DannyBee wrote: post #31

"This resulted in estimated revenue losses for EU states, other than Ireland, of between 51 and 54 billion euros between 2013 and 2015, the report concluded." So if i understand this right, this is basically: the EU didn't really lose anything, since ireland is in the EU, but the other states would have gotten more in total if they weren't allowed to do this? My other understanding is that the tax laws of all the EU…

Not a reasonable conversion for mainly two reasons:

* Ireland is a stepstone to not taxing most of their profits at all. Read about the double Irish with a Dutch sandwich (expiring in 2020). Google for example was (is?) an aggressive user of this technique.

* Ireland has made (according to the EU) illegal custom agreements with multinationals. These erode the taxable base in a way that has no link with reality whatsoever. That goes against OECD and EU principles.

[0] https://en.wikipedia.org/wiki/Double_Irish_arrangement [1] https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-i...

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#52

Post by gaius »

dangsmum wrote: post #33
gaius wrote: post #8

Earlier quoted context omitted.

There's no such thing as "digital revenue" - all this money comes from the real economy.

thats what the bitcoin detractors said, didnt work out to well for them did it? and anyway, even if you limit it to "real economy" (if anything in cyberspace can really be counted as real, which is highly suspect) it comes from ad revenue. all taxing eu ad revenue in cyberspace will do is ensure eu companies cant competitively show their ads in cyberspace, doing so will lose the eu a lot more than just "tax".

Ad spending ultimately comes from sales revenue from physical goods and services and is intended to drive those sales.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#53

Post by Oletros »

DannyBee wrote: post #32
seszett wrote: post #24

Earlier quoted context omitted.

> How do they "exist" in the EU? They both have headquarters in Dublin.

Which i'm sure they would happily burn to the ground if it meant they weren't taxed there. I don't think you want to go with the argument of physical presence. It rarely works well with any multinational.

> It rarely works well with any multinational.

how many multinationals have left any big market just for taxation?

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#54

Post by mjevans »

qxmat wrote: post #37
DVassallo wrote: post #2

I wonder how much tax revenue the EU would have lost if Google and Facebook didn't exist.

Large tech companies employ hollywood accounting techniques to continually reinvest surplus revenue. In doing so they rarely post any significant profit, depriving the taxmax of corporation tax. This 'reinvestment' is used to compete and drive profitable competitors out of business. This is an unfair practice. The result - no profitable companies, smaller taxable base and nothing for the taxman to collect. The bigger…

It doesn't just have to be tech companies, but the interesting thing is the abuse of 'intellectual property' (a thing which governments literally imagined in to existence) being used to transfer around wealth through agreements that, without it, wouldn't hold any water.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#55

Post by gaius »

sddfd wrote: post #36
DannyBee wrote: post #31

"This resulted in estimated revenue losses for EU states, other than Ireland, of between 51 and 54 billion euros between 2013 and 2015, the report concluded." So if i understand this right, this is basically: the EU didn't really lose anything, since ireland is in the EU, but the other states would have gotten more in total if they weren't allowed to do this? My other understanding is that the tax laws of all the EU…

Not really. Ireland has some deals going with several digital multinationals. The guardian writes: "Google pays €47m in tax in Ireland on €22bn sales revenue" https://www.theguardian.com/business/2016/nov/04/google-pays...

Ireland is only able to charge such low corporation tax due to the generous subsidies it receives from the EU too.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#56

Post by staticelf »

I really hope a new tax bill comes through, I am tired of US companies (and others) that can simply avoid paying tax while small shops pay a lot of taxes in the EU. They use our well developed infrastructure for their own benefit and does not pay anything back.

I hope they get a fat bill.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#57

Post by markvdb »

seanieb wrote: post #28

"This resulted in estimated revenue losses for EU states, other than Ireland" What does this mean? Ireland is in the EU. It's like complaining France or Germany don't share their tax revenue proportionally with the rest of the EU states. Ireland and other EU states have sovereignty over their own tax laws. If you change that you will basically change what the EU is.

Ireland has sovereignty over its tax law to a certain extent. For VAT for example there is an EU minimum standard rate of 15% (with an option for a reduced rate).

One of the biggest loopholes is _finally_ expiring in 2020: https://en.wikipedia.org/wiki/Double_Irish_arrangement .

Something else Ireland is limited in is custom tax deals/rulings with individual companies. As an EU member state, one can not just decide to apply an individual tax base or tax rate reduction without basing this in reality, hence https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-i... .

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#58

Post by whb07 »

I wonder what would happen if G/F just upped and "left" the EU? Ensuring to close every physical location as they did so. I wonder how much of a bind the politicians would be trying to remain in power as they would be in the position of trying to add Google and Facebook to the ban list or just continuing like normal except with less tax revenue.

Does anyone here really believe that any EU bureaucrat would ban Facebook and Google? Enforce a massive ban like China or some dictatorship? I think it's one thing to never have had. It's another to have had and then have it taken away. The latter is infinitely more painful.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#59

Post by k-mcgrady »

DannyBee wrote: post #35
Oletros wrote: post #11

Earlier quoted context omitted.

I wonder how much revenue and profit would have lost Google and Facebook if they didn't exist in the EU

This is pretty dangerous thinking. The EU only has half a billion people. Thus, the truth is: Over time, these companies will make infinitely more from developing nations outside of the EU than they would from the EU. especially if the EU is taxing them heavily. Additionally, even if you say "don't care, if they leave we'll just build our own companies", now you are hamstringing the global growth of those companies.…

>> This is pretty dangerous thinking. The EU only has half a billion people. Thus, the truth is: Over time, these companies will make infinitely more from developing nations outside of the EU than they would from the EU. especially if the EU is taxing them heavily.

Disagree. Think about advertisers. A lot of products popular in the US are popular in the EU. When it comes to marketing the latest Hollywood blockbuster if they can't reach half a billion people through Facebook they'll go elsewhere. If half a billion people suddenly disappear from Facebook those people who have friends and family there will turn to other communication systems and Facebook may get used less and less.

Re: EU lost up to €5.4B in tax revenues from Google, Facebook: report

#60

Post by themihai »

Iv wrote: post #38
DannyBee wrote: post #31

"This resulted in estimated revenue losses for EU states, other than Ireland, of between 51 and 54 billion euros between 2013 and 2015, the report concluded." So if i understand this right, this is basically: the EU didn't really lose anything, since ireland is in the EU, but the other states would have gotten more in total if they weren't allowed to do this? My other understanding is that the tax laws of all the EU…

There is a movement calling for tax harmonization in EU. I think this is a "what-if" scenario. "What if there were no internal competition between EU state to make a race to the bottom in terms of tax on profits?"

Well the issue is not the competition on tax, it's tax avoidance/evasion. You can't compete on tax with fiscal paradises that provide no infrastructure to operate a business. Most of the corporations within EU simply create shell companies in Luxembourg and artificially siphon off their profits so that they can pay 1% tax there instead of aprox 20% within EU. Luxembourg doesn't contribute with anything(i.e. infrastructure) to their profit thus I believe this is not "fair". If this[1] is not tax evasion I don't know what tax evasion is

[1] https://www.theguardian.com/business/2014/nov/05/-sp-luxembo...

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