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France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

reuters.com

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Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#81

Post by rtpg »

dogma1138 wrote: post #47
immad wrote: post #25

Earlier quoted context omitted.

If you have headquarters in California you pay tax here as well as a bit in Delaware The reason to register in Delaware is because of business friendly courts there. I don't believe there is a tax advantage

The federal corporate tax can be up to 35%, which is the highest in the world outside of some literally banana republics. Delaware has a corporate tax rate of 8.7%, California has 8.84. So yes no one is incorporating in Delaware becuase of taxes, WA, TX, NV and a few others have zero corporate tax.

Isn't this a misrepresentation of the global state? I think the corporate tax rate in France is 33% of profits, which isn't far from 35%

Not sure how state tax rates interact with the federal one though

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#82

Post by pipio21 »

csomar wrote: post #66
sddfd wrote: post #16

This is not about taxing revenues instead of profits. This is about taxing EU-wide profits in EU countries proportional to the revenues generated in that country. At the moment, many big tech companies use bookkeeping tricks to make it look like all their profit is generated in, for example, Ireland, while the revenue is generated in other EU counties. Unfortunately, Ireland has special tax rates for these companies…

Can you explain what are these tricks? Asking for a friend. A link is fine too.

1.Have multiple subsidiaries of the same company in different countries.

2.Give intellectual property rights to one company in one country with low taxation like Ireland or a state like Maryland.

3. Make all the subsidiaries pay arbitrary patent-copyright-trademark rights to the company in Ireland-Maryland-Singapur so all the profits become zero in the different countries while transferring all those profits away.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#83

Post by joshfraser »

anonymousDan wrote: post #61
joshfraser wrote: post #52

Someone needs to start a company that offers transfer pricing as a service. Sign up and get a physical address, subsidiary corporations, bank accounts and even employees & board members in Ireland. Much of this can be shared infrastructure of course. If tax avoidance is going to be legal for the big guys, why not make it accessible to everyone?

Google Europe has 6000 employees in Dublin, so it is a bit unfair to cast it as some kind of brass plate operation.

At Google's level, transfer pricing is a negotiation game with tax authorities. Having that many employees based in Ireland helps Google's case for routing more revenue through a double-Irish arrangement and making profits disappear.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#84

Post by [deleted] »

joshfraser wrote: post #52

Someone needs to start a company that offers transfer pricing as a service. Sign up and get a physical address, subsidiary corporations, bank accounts and even employees & board members in Ireland. Much of this can be shared infrastructure of course. If tax avoidance is going to be legal for the big guys, why not make it accessible to everyone?

[deleted]

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#85

Post by prostoalex »

eloff wrote: post #39
albertgoeswoof wrote: post #38

> A French court ruled in July French court ruled that Google, now part of Alphabet Inc, was not liable to pay 1.1 billion euros ($1.3 billion) in back taxes because it had no “permanent establishment” in France and ran its operations there from Ireland. How strange. I didn't know Google were an Irish company. I see them when I connect to the internet from all over the world. It looks like Airbnb also have their EMEA…

That's illegal for a person to do, but legal for these big companies. Don't blame the companies for exploiting loopholes. Blame the law. Fix the law.

The grandparent would be eligible to pay taxes at off-shore locations if he had any income generated at those off-shore locations. The IRS would treat that as foreign income and the first $100,800 of it might qualify for exclusion https://www.irs.gov/individuals/international-taxpayers/fore...

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#86

Post by prostoalex »

enraged_camel wrote: post #62
eloff wrote: post #39

Earlier quoted context omitted.

That's illegal for a person to do, but legal for these big companies. Don't blame the companies for exploiting loopholes. Blame the law. Fix the law.

>>Don't blame the companies for exploiting loopholes. Blame the law. The companies may be acting legally, but the question is whether they are acting morally. We generally expect that of people. Corporations are people, right?

It's one of those things where either everyone has to do it, or no one does. Nobody wants to be the first schmuck to pay higher taxes while allowing the competition to accummulate larger cash reserves and gain better margin flexibility.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#87

Post by prostoalex »

joshfraser wrote: post #52

Someone needs to start a company that offers transfer pricing as a service. Sign up and get a physical address, subsidiary corporations, bank accounts and even employees & board members in Ireland. Much of this can be shared infrastructure of course. If tax avoidance is going to be legal for the big guys, why not make it accessible to everyone?

As soon as you personally take advantage of the money on that account, it's treated as personal income to you. But IRS Does have a concept of foreign income https://www.irs.gov/individuals/international-taxpayers/fore...

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#88

Post by joshfraser »

prostoalex wrote: post #87
joshfraser wrote: post #52

Someone needs to start a company that offers transfer pricing as a service. Sign up and get a physical address, subsidiary corporations, bank accounts and even employees & board members in Ireland. Much of this can be shared infrastructure of course. If tax avoidance is going to be legal for the big guys, why not make it accessible to everyone?

As soon as you personally take advantage of the money on that account, it's treated as personal income to you. But IRS Does have a concept of foreign income https://www.irs.gov/individuals/international-taxpayers/fore...

That's why so many corporations keep their money offshore and figure out creative ways to spend it without repatriating it.

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#89

Post by joshfraser »

eternauta3k wrote: post #57
joshfraser wrote: post #52

Someone needs to start a company that offers transfer pricing as a service. Sign up and get a physical address, subsidiary corporations, bank accounts and even employees & board members in Ireland. Much of this can be shared infrastructure of course. If tax avoidance is going to be legal for the big guys, why not make it accessible to everyone?

I'm sure this exists. The Planet Money folks hired a similar service for some other tax haven.

There are tons of financial firms that will set it up for you on a consulting basis. Here in the bay area, Duff & Phelps work with a lot of the big tech companies. Don't know of anyone who's automated the process or turned it into a SAAS product yet (for obvious reasons).

Re: France, Germany, Italy, Spain seek to base taxes on digital giants' revenues

#90

Post by mbroncano »

ithkuil wrote: post #45
alkonaut wrote: post #31

Earlier quoted context omitted.

Not sure I understand the question. Isn't that "most of it"? I use a road to get to work. My work pay my salary. My salary pays amazon for crap delivered to my house. The package comes delivered on the same road. The internet connection I used to visit amazons page is delivered via fiber to my house, funded just like other infrastructure. So the road and fiber was very important for my society being a developed high-…

All of those things you mentioned are already paid by somebody: the customer pays for your broadband and couriers pay for roads thorough their revenue taxes and tolls. However, the topic here is the indirect benefit of being a wealthy nation where you can have customers wealthy enough to care about your products in the first place. The argument is that this is the result of something the society or the government did…

All those thing are indeed being paid ... through taxes, thus the whole point of collecting them.
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