France has approved a digital services tax despite threats of retaliation by US • Hacker News Board

Re: France has approved a digital services tax despite threats of retaliation by US

#71

Post by 99052882514569 » Thu, Jul 11, 2019, 4:24 PM UTC

the-dude wrote: post #56

99052882514569 wrote: post #3

Taxing digital companies based on digital presence certainly makes sense to me, as a layperson. A company that's selling ads to a French company that wants to show those ads to French users is doing business in France, end of story. Taxing only very large corporations - that's a little more questionable, but plenty of countries (including the US) treat small businesses preferentially, so it's not like it's unpreceden…

Not to refute your point, but they surely already charge VAT. However, this is commonly described as a tax for the buyer, not the seller. On the other hand, most revenue is probably B2B and business reclaim their VAT.

Customers buying from local businesses that compete with them also pay VAT, so the consumer side of it is fair. But local businesses themselves pay much more in corporate taxes, which is not.

You are free to argue that the playing field can be likewise leveled by lowering corporate taxes to Ireland's levels. That's a debate for the French to have, as citizens of a sovereign country. It is not a decision to be forced on them by global tax loopholes.

Re: France has approved a digital services tax despite threats of retaliation by US

#72

Post by the-dude » Thu, Jul 11, 2019, 4:25 PM UTC

bluecalm wrote: post #54

99052882514569 wrote: post #3

Taxing digital companies based on digital presence certainly makes sense to me, as a layperson. A company that's selling ads to a French company that wants to show those ads to French users is doing business in France, end of story. Taxing only very large corporations - that's a little more questionable, but plenty of countries (including the US) treat small businesses preferentially, so it's not like it's unpreceden…

It's really not that simple. They don't use any of the country infrastructure or workers. If I make a video game and sell it to a person in France does it mean I do business in France? It seems to me it should be treated the same as French person coming to my country, buying my game and going back home. We've just skipped on unnecessary traveling. Those things are subject to debate and power struggle but it's clear t…

Try bringing much more expensive items across a border and you will see what happens ( you will be taxed at the border ).

Re: France has approved a digital services tax despite threats of retaliation by US

#73

Post by mikeash » Thu, Jul 11, 2019, 4:25 PM UTC

bko wrote: post #15

I never understood the logic behind taxing large internet businesses. The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skill…

The idea behind taxes is that society needs government and government needs money, that’s it. Some taxes are connected to the use of specific public resources, but many are not. What do my income taxes pay for? The answer is basically “everything.”

Re: France has approved a digital services tax despite threats of retaliation by US

#74

Post by jbigelow76 » Thu, Jul 11, 2019, 4:26 PM UTC

dahfizz wrote: post #24

jbigelow76 wrote: post #13

Earlier quoted context omitted.

Yes, they should. FB doesn't want to get taxed? Create a non-tracking version and paywall it, I would actually pay for that myself.

You and maybe a dozen other people. Social media is worthless without widespread adoption.

I should have expanded more on your original reply in my parent response but rather than editing it I'll continue it here.

You said: Or do you expect these companies would continue to operate in the EU with no net profit.

A tax doesn't have to eat up all the net profit. Googling "how much is a Facebook user worth" comes back with about $158 dollars, whether that's accurate or not is beside the point, some value can be derived[1], France can say "we want a X% tax on that value". If the tax is too high FB leaves the market and France gets nothing so there is little incentive to do that[2]. FB then has to take the cost of servicing a user against their value minus the tax and decide if they want to continue as is, offer a paywall option to avoid the tax, or leave the market altogether... I don't understand why this would be so controversial?

[1] Whether FB or regulators should set that value is up for discussion.

[2] Some would see FB as such an overwhelming societal net negative they would want to tax it out of existence, but that could be true for any industry (fossil fuels, tobacco , meat, etc...)

Re: France has approved a digital services tax despite threats of retaliation by US

#75

Post by ziddoap » Thu, Jul 11, 2019, 4:26 PM UTC

liberte82 wrote: post #68

aey wrote: post #36

Earlier quoted context omitted.

No matter how the law is written, if the result is that the exceptions only apply to French companies and not to the US, it’s bullshit :). They could pick arbitrary ways to bisect the set until they get the desired result.

Why? Is only the US allowed to practice protectionism?

Very salient point.

It's funny that the US is allowed to tariff anyone who breathes at them wrong under the guise of protecting US jobs/etc. but they are up in arms when another country decides to implement anything remotely seen as "against the US".

Re: France has approved a digital services tax despite threats of retaliation by US

#76

Post by liberte82 » Thu, Jul 11, 2019, 4:26 PM UTC

ElKrist wrote: post #21

The US administration is presenting the new tax as if it was specifically targeted to US companies because of their origin. Like a tariff. It is not the case at all. Yes the biggest tech giants that do not pay enough tax are mostly from the US (also other companies from other countries are affected too) But it is not because they are from the US that this new tax is created. It is simply because they don't pay enough…

The US is big into tariffs these days, why do they complain when the same treatment is applied in return?

Re: France has approved a digital services tax despite threats of retaliation by US

#77

Post by 99052882514569 » Thu, Jul 11, 2019, 4:28 PM UTC

bluecalm wrote: post #54

99052882514569 wrote: post #3

Taxing digital companies based on digital presence certainly makes sense to me, as a layperson. A company that's selling ads to a French company that wants to show those ads to French users is doing business in France, end of story. Taxing only very large corporations - that's a little more questionable, but plenty of countries (including the US) treat small businesses preferentially, so it's not like it's unpreceden…

It's really not that simple. They don't use any of the country infrastructure or workers. If I make a video game and sell it to a person in France does it mean I do business in France? It seems to me it should be treated the same as French person coming to my country, buying my game and going back home. We've just skipped on unnecessary traveling. Those things are subject to debate and power struggle but it's clear t…

>It's really not that simple. They don't use any of the country infrastructure or workers.

They absolutely do. They implicitly use courts, police, customs, trademark/contract enforcement, etc.

Re: France has approved a digital services tax despite threats of retaliation by US

#78

Post by icebraining » Thu, Jul 11, 2019, 4:31 PM UTC

toomuchtodo wrote: post #58

csomar wrote: post #52

This is a stupid move. The tax is not payed by big tech giants. Not by both, either. It's complicated and depends on who needs whom the more. If there are no alternative to AWS, Google Adsense, or an American SaaS in France; the French people will be paying all of the tax. The big tech giants will just slap them with a 3% surcharge for being in France. This is different from US-China tariffs. If the US can source fro…

This would incentivize competitors in France. That’s a good thing for France.

From what I can tell, it will incentivize competitors everywhere, as long as they don't have revenues over €750M.

Re: France has approved a digital services tax despite threats of retaliation by US

#79

Post by noir-york » Thu, Jul 11, 2019, 4:31 PM UTC

dahfizz wrote: post #7

jbigelow76 wrote: post #4

Good. Next step, have EU countries come up with an estimation of the value of their citizens' private data that FB and Google gobbles up and tax them on that too. Edit: companies -> countries

Does that mean that EU citizens should also pay for these services? Or do you expect these companies would continue to operate in the EU with no net profit.

> Does that mean that EU citizens should also pay for these services?

Making people pay to access Facebook etc would be the best possible move for society ever.

Re: France has approved a digital services tax despite threats of retaliation by US

#80

Post by victorNicollet » Thu, Jul 11, 2019, 4:31 PM UTC

bluecalm wrote: post #54

99052882514569 wrote: post #3

Taxing digital companies based on digital presence certainly makes sense to me, as a layperson. A company that's selling ads to a French company that wants to show those ads to French users is doing business in France, end of story. Taxing only very large corporations - that's a little more questionable, but plenty of countries (including the US) treat small businesses preferentially, so it's not like it's unpreceden…

It's really not that simple. They don't use any of the country infrastructure or workers. If I make a video game and sell it to a person in France does it mean I do business in France? It seems to me it should be treated the same as French person coming to my country, buying my game and going back home. We've just skipped on unnecessary traveling. Those things are subject to debate and power struggle but it's clear t…

It's true that when a French person comes to your country to buy your product, then goes back to France, the burden is on them to pay the relevant customs and taxes.

On the other hand, I would argue that the market of people who would come to your country to buy your product is significantly smaller than the market of people who buy it on the internet and have it delivered---and it's fairly typical for companies sending products to France to be asked to collect any duties, customs and taxes from the purchaser. Why would electronic delivery be different ?