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EU adopts global minimum 15% tax on big business

bbc.com

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Re: EU adopts global minimum 15% tax on big business

#91

Post by closewith »

wernercd wrote: post #74
toast0 wrote: post #54

Earlier quoted context omitted.

Why should the profit be made in france if the engineering that went into delivery was made in the US, the content was made in X, the deal for the content was negotiated in Y, network source is Z (probably france, but not necessarily) VAT in France on the subscription makes sense, but figuring out where the profit lies, is more nebulous.

If you offer a service in France, charge $10 and pay %15 on that $10... then when that money makes it into the US and Netflix has to decide what the profit is (after server fees, electricity, content fees, paying off politicians, etc)? Not sure but I'm seeing 2 different conversations here: flat tax on what you pay at the pump... and what the company reports as profit at the end of the day. France doesn't care if you…

You are thinking of VAT, which in France is normally 20%.

That is not the tax that is being referred to here, which is Corporation Tax - the tax on corporate profits.

Re: EU adopts global minimum 15% tax on big business

#92

Post by secondcoming »

agilob wrote: post #5
mytailorisrich wrote: post #2

> European leaders praised the decision, with Germany's Chancellor Olaf Scholz describing it as a "project close to my heart". French President Emmanuel Macron said the country had been pushing the idea for more than four years. Of course countries with high taxes are all for raising taxes in countries where they are lower! Now, unfortunately the article does not mention the interesting bit, which is that EU countrie…

Didn't know about Hungary. All I was thinking was how EU had to force Apple and Ireland to pay taxes in Ireland, because... Ireland didn't want some free billions https://www.theguardian.com/business/2016/aug/30/apple-pay-b...

Ireland would prefer the jobs to the taxes. A country has to tune itself to keep people employed. Every country is different and small countries would be ruined by tax harmonisation. France et al give zero shits about Ireland, it wants the jobs Ireland has.

Re: EU adopts global minimum 15% tax on big business

#93

Post by secondcoming »

manmal wrote: post #31
mytailorisrich wrote: post #26

Earlier quoted context omitted.

Why do countries have lower tax rates to start with? For many small/remote countries, lower corporation tax is a way to attract companies that would never have come if the tax rate was higher.

Looking at you, Ireland.

Ireland did the right thing. The 1980’s and 1990’s were bleak times.

Re: EU adopts global minimum 15% tax on big business

#94

Post by dantheman »

nonameiguess wrote: post #59
oliv__ wrote: post #6

"The US has not taken steps to adopt the rules so far, despite Ms Yellen's championship of the plan." Lol, obviously. Cheering them on as they shoot themselves in the foot

I wish the BBC would elaborate on what they mean by this. The US passed a 15% corporate minimum tax in August.

Hopefully the US will lower it in a few years.

Re: EU adopts global minimum 15% tax on big business

#95

Post by bee_rider »

redm wrote: post #70
toast0 wrote: post #54

Earlier quoted context omitted.

Why should the profit be made in france if the engineering that went into delivery was made in the US, the content was made in X, the deal for the content was negotiated in Y, network source is Z (probably france, but not necessarily) VAT in France on the subscription makes sense, but figuring out where the profit lies, is more nebulous.

It's where the profits are, not where the cost centers are. If the customers are in France, the profits are in France.

What if Netflix France has to license their content and platform from Netflix US, the the license costs are coincidentally exactly the same as the revenue made in France? Then there will be no profits in France.

Re: EU adopts global minimum 15% tax on big business

#96

Post by _8j50 »

toast0 wrote: post #54
torben-friis wrote: post #43

Earlier quoted context omitted.

Surely if, say, netflix is offered to french costumers profit is made in france?

Why should the profit be made in france if the engineering that went into delivery was made in the US, the content was made in X, the deal for the content was negotiated in Y, network source is Z (probably france, but not necessarily) VAT in France on the subscription makes sense, but figuring out where the profit lies, is more nebulous.

Because that is where the sale happened. You buy a lot of stuff that was made in China but pay tax in your country right? Not only was the sale in france, the goods that the customer pay for (video content) are delivered too france like normal goods and watched/consumed in france.

Re: EU adopts global minimum 15% tax on big business

#97

Post by mywittyname »

dantheman wrote: post #87
redm wrote: post #70

Earlier quoted context omitted.

It's where the profits are, not where the cost centers are. If the customers are in France, the profits are in France.

Are you confusing profit with revenue? The revenue is in France - easy. Profit is revenue - cost, which costs do you factor in?

At some point, I think governments are going to need to break down and start taxing revenue instead of profits.

A 3% tax on total revenue is the same as a 15% tax on the profits of a product with 20% profit margins.

Re: EU adopts global minimum 15% tax on big business

#98

Post by beachy »

toast0 wrote: post #54
torben-friis wrote: post #43

Earlier quoted context omitted.

Surely if, say, netflix is offered to french costumers profit is made in france?

Why should the profit be made in france if the engineering that went into delivery was made in the US, the content was made in X, the deal for the content was negotiated in Y, network source is Z (probably france, but not necessarily) VAT in France on the subscription makes sense, but figuring out where the profit lies, is more nebulous.

True in theory (and much more so for physical goods) but in practice for services like Netflix, Google and Facebook, from the EU's point of view, who cares.

Giant tech company, pay your 15% based on local advertising revenue from local customers. We all know you'll still be making huge profits regardless of your costs. Your whole business is built on fixed costs and infinite scaling of revenue.

If you really can't afford to pay 15% then leave the market, someone will certainly take your place.

Re: EU adopts global minimum 15% tax on big business

#99

Post by tmtvl »

dantheman wrote: post #89
zerr wrote: post #66

Why businesses are taxed so low but individuals/employees so high in EU (35%-65% income tax)?

Ideally both should not be taxed.

Then where do we get the money to pay for things like the justice system, law enforcement, national infrastructure, unemployment benefits, healthcare, pensions, customs, diplomats,...? Switch to a system where the government owns everything and gives people what they need if they work properly?

Re: EU adopts global minimum 15% tax on big business

#100

Post by brnt »

Nextgrid wrote: post #34
martinald wrote: post #25

This isn't really as big a deal as it's been made out to be, IMO. This is Pillar 2 of the OECDs tax reform for corporations. Pillar 1 is much more interesting, and would require corporations to actually book profits where they are made (so not putting everything through Ireland for example). This will have a much bigger impact imo than this 15% ruling, because right now there are a bunch of tricks you can use to get…

Out of curiosity, how do you define where profits are made when it comes to selling digital services? There is no physical movement of goods. Do you determine it based on where the software was originally written?

For VAT this is already defined (in the EU): wherever the purchaser is when they get their goods handed to them. If I drive over the border to Germany, I pay German taxes. If I buy online and have it shipped to the Netherlands, I pay Dutch taxes.

A digital good is handed to me wherever I am when I purchase it, so I pay taxes in that jurisdiction.

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