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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

#91

Post by prostoalex »

joshfraser wrote: post #88
prostoalex wrote: post #87

Earlier quoted context omitted.

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.

Only works with the foreign revenue, US-based revenues will be taxed regardless of where they end up eventually.

Europeans kinda shot themselves in the foot by not having a similar rule, and looks like they're wising up to that.

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

#92

Post by kig »

microcolonel wrote: post #20
pjc50 wrote: post #12

Earlier quoted context omitted.

L'etat, c'est nous. (Yes, that's a joke in French, but I'm not really about to type a treatise on popular sovereignty in the Spanish constitution for two reasons. Firstly I'm on a phone, and secondly I know nothing about it) I do wish one day we could have a discussion that didn't have to argue the existence of gonvernment and taxation from first principles, but today is not that day.

Néanmoins, nous ne sommes pas l'état. A tax on Spanish and French revenues is a tax on Spanish and French consumption, which is already charged. If it is advertising revenue, then the tax will be charged on the advertised products and services and likely also on the charges to the advertisers. L'état, c'est certains d'entre nous! > I do wish one day we could have a discussion that didn't have to argue the existence o…

The money that goes to the state in taxes is spent by the state on services provided by the citizens of the state. The alternative is the money going to a tax haven bank account of a multinational. Pat yourself on the back knowing that your citizens are doing less business and more of their money is going to the multinational for whatever purpose the multinational sees fit.

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

#93

Post by Iv »

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…

This is one of the main criticism about how the EU was made: freedom for funds goods and (mostly) workers to move around in the EU zone, without tariffs or constraints but no fiscal harmonization has been done.

Therefore countries with low taxes (Ireland but also Luxembourg) attract a disproportionate amount of big companies HQ. Ikea, for instance, is officially declared in Luxembourg.

Why so many people in EU rejoice about the Brexit is because UK has been one of the main force opposing fiscal harmonization (apparently London is a bit of a tax haven for financial service companies) so hopefully this kind of efforts can go forward.

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

#94

Post by KGIII »

csomar wrote: post #76
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?

Get paid through anon. crypto and spend through anon. debit cards? This is already a solved issue.

That would be tax evasion. Tax evasion is illegal. Tax avoidance is legal.

This is not legal advice. I am not your lawyer. Consult a qualified attorney in the appropriate jurisdiction.

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

#95

Post by eloff »

toast0 wrote: post #60
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.

The problem with a person doing this style of tax avoidance is that the barrier to entrance is much higher than the gain. Assuming general principals of US tax law, if you're already working as an independent contractor, you could legally set up a local company and an overseas company, have the local company bill the client, pay you a reasonable amount, and pay the overseas company the remainder for the use of its na…

You're right that it is a lot of hassle, but you're also missing the fact that it's a lot easier for Google to defend itself to the IRS than for you to do so. The amount Google would need to pay lawyers, in that case, is so much smaller than what they save on taxes, that it makes perfect sense for them. The opposite is true for you. For example, the IRS will probably call you on your name licensing trick and charge you with tax evasion. Even if you could afford to defend yourself, you'd probably lose the case.

Also, I'm not an expert on the subject, but I seem to recall reading that in some countries, corporate tax tricks like that don't work for one-person companies. It depends on how many full-time employees the company has.

I think it's ridiculous that big megacorps can eliminate huge parts of their tax burden while the regular Joe cannot. The system is overly complex and tilted in the favor of the rich and large companies. That's not what the people agreed to when they accepted a taxation system during and following the first world war.

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

#96

Post by KGIII »

justinmk wrote: post #37
Nokinside wrote: post #29

There is room for innovation in taxation. We need new smart taxation for information economy. Taxing network externalizes and economic barriers for entry for example. Taxation could be used as natural pressure to correct market failures. Taxing revenue is not what EU countries propose, but it could be viable solution. Thinking aloud: If company has market share of X% of the population it pays tax from the revenue rel…

> Taxation could be used as natural pressure to correct market failures. Taxation isn't natural. By the way, I'd like to remind everyone: when the state taxes something, the state now depends on that thing for its budget. > If retail company that has 30% market share pays 0.3% extra from its revenue compared to tiny company with just 10,000 customers, it would probably be enough to even out the field and limit barrie…

Taxation may not be natural, but it is inherent in a society.

To explain, you give some of your kill to the tribe. You share with your family, to provide for them. In return, you get a tribe or family.

The independent person without obligation to return to the social good is largely a myth and, if done, would mean extinction.

Additionally, I don't mind paying my taxes. I do mind how my taxes are spent. They are the cost of living in society.

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

#97

Post by jaredklewis »

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…

If this system is enacted, will the benefits of staying in the EU out weigh just moving all the shell companies to the Caymans or wherever?

I wish countries would give up on corporate taxes. They are either easily circumvented, or you need a massive regulatory body to analyze all corporate transactions and determine if they are "fair."

All the same tax revenue can be gained through much better systems that are not trivially circumvented and do not create a perverse incentive for your country's companies to up and move to the nearest tax haven.

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

#98

Post by eloff »

charlesdm wrote: post #78
csomar wrote: post #72

Earlier quoted context omitted.

How does this apply to other countries? Aren't you supposed to get residence in some country before losing the residence connection of your original country? That being said, there are countries with loose taxation like Thailand where you can establish residence and avoid taxes as long as you are not operating in the country itself.

Not really, but it's better to have official residency somewhere, though. Some countries are quite flexible on residency, however. Cyprus offers residency after spending 60 days per year in the country, and exempts foreign income from tax. In Malta you can get residency by paying €20k a year (no requirement to spend any time in the country), and foreign income is also exempt from tax, etc. > That being said, there ar…

Panama also does not tax foreign income. I worked remotely from Panama for many years and it was lovely. My take home salary was better than what could be achieved working for the likes of Google or Facebook, stock compensation not considered. I met my wife there too. But the threshold to get residency is higher.

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

#99

Post by jacquesm »

jaredklewis wrote: post #97
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…

If this system is enacted, will the benefits of staying in the EU out weigh just moving all the shell companies to the Caymans or wherever? I wish countries would give up on corporate taxes. They are either easily circumvented, or you need a massive regulatory body to analyze all corporate transactions and determine if they are "fair." All the same tax revenue can be gained through much better systems that are not tr…

The goal is to make it pointless to use shell companies to avoid paying taxes.

> I wish countries would give up on corporate taxes.

I really wish they won't. Right now the small companies pay corporate taxes just fine, it is the big ones that play all kinds of shell games to get out from under their obligations.

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

#100

Post by Houshalter »

Nokinside wrote: post #56
justinmk wrote: post #37

Earlier quoted context omitted.

> Taxation could be used as natural pressure to correct market failures. Taxation isn't natural. By the way, I'd like to remind everyone: when the state taxes something, the state now depends on that thing for its budget. > If retail company that has 30% market share pays 0.3% extra from its revenue compared to tiny company with just 10,000 customers, it would probably be enough to even out the field and limit barrie…

I run business in Finland and pay high taxes. Friction is not the taxes. If it were, I would have moved my business to Estonia long time ago, it's just few hours away. I could do it over internet in few hours and start within days. There are different ways for countries compete as "business platforms". I'm not saying that some way is better than another, what I'm saying is that there are different strategies that can…

I think you've vastly confused cause and effect. Rich economies can afford high tax rates because they are rich, and poor economies have to compete for what businesses they can get.

Another obvious confounder is that richer states tend to be more urban, and urban places tend to be more liberal. Which vote for higher tax rates and social programs. Rural states are more conservative which favor smaller governments. This is just an effect of political demographics, not a cause of superior tax policies.

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