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Four EU Countries Seek Higher Taxes On Google and Amazon (reuters.com)
An anonymous reader quotes Reuters:
France, Germany, Italy and Spain want digital multinationals like Amazon and Google to be taxed in Europe based on their revenues, rather than only profits as now, their finance ministers said in a joint letter. France is leading a push to clamp down on the taxation of such companies, but has found support from other countries also frustrated at the low tax they receive under current international rules. Currently such companies are often taxed on profits booked by subsidiaries in low-tax countries like Ireland even though the revenue originated from other EU countries. "We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries," the four ministers wrote in a letter seen by Reuters.
everything
Want more tax money? Innovate, and house more corporate headquarters.
Just throwing this in here: When you order multiple items from the same reseller on Amazon, they will just multiply up the shipping and charge you the maximum possible shipping cost.
Next, the seller calculates the actual shipping cost, which is lower since all your items ship in the same box, and bills Amazon for the correct amount, and Amazon happily keeps the difference, earning many € extra for each order, without ever mentioning it to neither the seller not you, the customer.
You might want to share this info with your friends who order from Amazon.
For Google/Amazon: Pass the tax on to the European consumer. You have no real competition there anyway.
For US government: find something Europe likes to export here that we can compete in, and punitively tax foreign imports.
The U.S. needs a trade war with Europe like yesterday. Eurotrash is getting way too uppity. Maybe pull all US defense forces out (stripping installations of whatever isn't bolted down, burning the rest) and let Europe pay their own way using their new tax revenue.
"Well, that guy over there has money! Take it!"
Because it makes it completely clear who is actually paying the taxes - the customers. A tax on revenue is otherwise known as a sales tax.
Companies don't pay corporate taxes. It gets passed on to customers as higher prices, to employees as lower wages, and to owners/stockholders as reduced dividends. You see, companies are just paper entities - they don't really exist. They're just a line a bunch of people (owners/stockholders and employees) draw around themselves so they can declare "we are working together." All the productivity, all the innovation, all the decisions are made by those people, not "the company". The company is just an inanimate banner, a flag they hold over their operations.
So you can't really tax a company. That's like impounding a car for assisting in a bank robbery, or sentencing a PC to prison for being used in a hack. Losing those items just turns into an additional financial expense for the people who used to own them. Likewise, corporate taxes are just additional financial expenses for the people involved with a company - owners/stockholders, employees, and customers.
Once you realize this, you realize how stupid it is to have a million different taxes for a million different things. It's a horribly inefficient way to collect tax revenue. The most efficient method would be to have a single tax which you assess against all people. If you believe in progressive taxation, then the obvious tax to keep is the income tax. Pretty much all other taxes* can be eliminated with no effect on the economy or tax revenue, other than vastly reducing the amount of money wasted on collecting taxes and forcing people/businesses to keep track of a million different taxes.
* (Behavior-modifying taxes would still be useful since their primary goal is not to collect revenue for the government. e.g. Fuel taxes to encourage energy efficiency, property taxes to prevent speculators from holding on to fallow land which could otherwise be put to much better use.)
This also avoids the hypocrisy of saying you believe in no taxation without representation, then simultaneously wanting to tax corporations while believing they should have no role in government.
And this is why we like Putin, who elected Trump, so that this could never happen here!
TRUMP powa!
I should enlighten readers on the process:
1. Italy wants to impose more taxes on its citizens;
2. at the same time, we have an election next year, so Italy does not want to tell that to citizens;
3.Internet has been used by citizens to "shop abroad" i.e. for all intents become EU citizens and get the best after tax deal;
4.since an "internet tax"covers both points, politicians love it.
in one stroke, I am taxing citizens without their knowledge (since tax comes from revenues), and I divert some of the business to national retailers, which are taxed more still. Master stroke.
"If a boss demands loyalty, give him integrity. But if he demands integrity, give him loyalty." (John Boyd, 1927-1997)
I'd like to thank all the lawyers and accountants who work diligently to keep every dollar or euro out of the hands of those greedy bastards in Brussells.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
...only they'd be right, this time
The EU is penalizing American companies for beating their own companies at the same game.
While I believe that companies might need to pay a bit more on their profits, companies don't really operate like individuals. Essentially applying an "income tax" to companies is a terrible idea.
Companies which actually produce things (be it information, services or goods) operate by taking their income, and spending it on the raw materials - paying employees, purchasing ingredients, paying for operating costs, electricity, shipping, building rent, other contracts - and then outputting goods (information or services too) which they then sell in order to try to make more than it cost them to actually produce them so that they can continue to operate
Taxing the profits means that the company makes less and less for itself (and thus its growth could be curbed), so technically even if you tax 100% of the profit, the company could still stay in business (but not grow). But if you tax the revenue or income you are in danger of literally eating into its ability to even stay the same size. And taxes always tend to increase. So this is a slippery slope where it eventually becomes not just unprofitable to run a company but its a losing proposition because the tax can cut into the operating costs.
They invent nothing, make nothing, they just whine, whine and whine and punish those who innovate and pioneer. Europeans believe themselves to be the greatest civilization that ever existed or ever will and think they have the right to dictate law over the whole world. Europeans deserve nothing but spite. Fortunately they're forever in thrall of the US, whether they like it or not. :)
Local companies that can't affort Luxembourg or Dublin headquarters pay up to 60% of the profits in taxes.
Big players pay 12 or less.
I could sell my items at 30 to 40% less if I could have HQ in Luxenbourg. But I can't
This is ridicolously UNFAIR and must be stopped NOW.
If you want to sell your items into my country, you pay the % taxes I pay. Period.
Or GET AWAY FROM HERE.
The international constructions current in place in the EU and outside allow these multinationals to legally not pay taxes. That gives them an unfair advantage to a market, that should be open to all with good ideas and willing to work hard. I can't believe they will succeed in changing this since the E.C. is walking on the leach of the multinationals. Nevertheless it is noting but fair that every citizen of a society contributes their share to taxes. And wealthy citizens doing business here in europe, are no exception to that.
These companies trade service for eyeballs and clicks for cash
Yes, taxing on revenue can be accomplished by sales tax. What's the problem? Or do these countries want to charge sales tax AND also double tax the corporation again for the same sale as an additional "revenue tax"? First would be ok. The second clearly not.
Google should shut off its search engine for a month in those countries. Amazon should stop selling stuff too. But they won't because those companies have no balls.
The problem with government and Europe in particular (though Europe is not the worst even) is most if not all have setup redistribution of wealth schemes that dishonestly hide and deprive us of the income needed to survive independently of government. Government is depriving us of choice. Europe is worse, but America is not much better. I'm middle class and I'm deprived (American here) of about 70% of my income (maybe more, but this is what I can roughly calculate it to be based on what I know). Most people deny it because they just can't believe it or refuse to account for EVERYTHING stolen from them by government. Many people think they need government to steal from others such that they can feed themselves, cloth themselves, educate their children, and so on. This is only true because the government has deprived the majority of so much of their income.
Most don't or won't take into account everything that is stolen from them through taxation and "fees": Things like sales taxes, vehicle registration "fees", money stolen prior to your official "pay", etc
I'm self employed and the government doesn't steal 15% from me and 15% from my employer. Yes your paycheck would about about 15% higher and anybody who is in business for themselves in the US probably realizes that. Self employed individuals have about 30% stolen outright through taxes since the government can't hide the other 15% since its the individual who ends up paying it. They also steal another 7% from me for providing a service (not applicable to everybody, lawyers don't pay it, accountants don't pay it, but computer repair service people do in NJ and other places). Then they make me register a vehicle and charge a fee for that. It's a hidden tax because taxes are taboo. Nobody wants t pay taxes. So they make up some other name for it. Then there are property taxes. If you own property like I do and make about average wages you pay probably 15% here. And if you rent you probably pay more in a weird way because you'll never get ownership of the property. Then depending on where you like you live you probably pay another 7%-10% in sales taxes. In Europe it's 20-25%. And I won't get into all the other hidden fees, fines, and similar you are forced to pay. They are just too numerous to account for. Businesses also pay higher fees for everything which I believe has to do with taxes (electric, phone, gas, etc). Ohh an individuals also pay VERY high taxes on phone services.
"Safety" has become so costly in terms of taxes and monies stolen from the people I bet we'd save a lot more lives by simply eliminating the taxes altogether and contributing even a small percentage of these funds toward solving the top 10 killers instead. That is the things that kill the most number of people rather than freaking out over drunk driving, drivers licenses/license plates, "children" (background checks, internet "safety", etc), police, guns, drugs, and the numerous other places and things where money is going toward and the problems can be resolved in other ways (private security services- or not renting houses with lead in them to kids with families, etc).
The entire world, including America, has the exact same issues. Basically, as long as we all make laws/tax rules that allow them to manufacture goods/services elsewhere and then ship cheaply to western nations, they will continue this.
The best way is to drop all corporate taxes for a company that makes/produces local goods. And then put on a subtractive VAT on nearly everything, except create an additive VAT for imported parts. With this approach, it means that anything that is moved from wholesale to retail, OR is sold in the nation from out of the nation, will then be subject to this VAT. As it is, many nations, such as Mexico and CHina charge 17 % VATs. And disregard the fact that both also have some MAJOR tariffs on imports.
The real interesting part is how to get the VAT on goods/services shipped into another nation. I think that the best way, is to simply require that the shipping company pick up the tax and pay to the nation in which delivered. If somebody buys a good for $100 and they have a $17 VAT, then that is added on. With the service, it should be VATed at the rate in which it would happen in the original nation.
And most of Europe already charge a VAT. What is needed is for the VAT to be charged on shipped goods as well.
I prefer the "u" in honour as it seems to be missing these days.
Your first two paragraphs are really about transfer pricing used for tax avoidance. That would be fixable if there were sufficient political will, but there isn't. Most transfer pricing used for this is immediately apparent when you examine common ownership of the licensor and licensee. This is not hidden because it is not illegal, in fact it is usually listed on the 10k forms public corps file with SEC in the US. This is why stock prices do not reflect the low profit levels of companies using this tactic (I'm looking at you, Nike).
Changing the tax structure to lure companies to repatriate their money is absolutely the wrong answer. Period. The government either has authority over those companies, or it doesn't. If it does, they should pay the tax demanded. If it doesn't, why should they pay any tax at all?
If the tax rate is fair, then the companies dodging it are wrong to do so. If the tax rate is unfair, then the appropriate answer is to change it, not cheat.
Importantly, the corporations are not the ones to determine if it is fair, that is the province of the elected representatives of the PEOPLE. Unfortunately, our legislatures are far more responsive to corporate input than the people right now, mostly because the people do not pay sufficient attention and have little patience with subtle factors. We respond to complex situations based on soundbites that resonate with us.
Finally, I hate the flat tax idea. Because of the law of diminishing marginal utility (too much to go into here) flat taxes are very regressive in outcome. This is just a fancy way of saying that x% tax hits a poor person harder than a rich person. It may slow the rate of growth of a rich person but will actually degrade a poor person's standard of living.
Beyond that, as far as simplifying the tax system, I'm with you. It is a mess.
Last i read, the liberal lead tech giants wanted more taxes. Get after it already :D
Why don't they close these tax loopholes? Or are they only for euro countries?
Shouldn't shipping be free or at least some low nominal value?
The "low nominal value" is for economy shipping methods, such as Parcel Select or UPS Ground, assuming the total of items from a single seller meets a minimum size. An order that doesn't meet the minimum size incurs a fee because small orders are proportionally more expensive per item to ship. So does one for which a faster shipping method is selected without an annual subscription to faster shipping at that address.
If you buy from a brick and mortar retailer in your city, it has already paid for shipping from the distributor/manufacturer's city to your city.
But not to your door.
That's not how amazon works. Amazon gives the seller a "credit" for the amount of shipping regardless of what the actual shipping is.
Are you referring to media products (books, music CDs, DVDs, etc.) or non-media products?
It would work much better if the seller could actually set the shipping rate and give discounts for multiple items shipped together like you can on ebay.
Amazon works this way for professional sellers of non-media products. This R/C car dealer in Fort Wayne, Indiana, gave discounts for combined shipping last I checked.
If you think you can tax revenue, your smoking something good. What would your tax rate be?
A typical value added tax in a European country is in the neighborhood of 20 percent.
A federalized tax structure would reduce corporations leveraging the advantageous tax situations in select countries. But the EU seems far from that model -- no "United States of Europe." Ireland negotiated a treaty in the 1990s with the US for the express purpose of attracting employers for its well-educated and young workforce. Why shouldn't trans-nationals do what's best for their shareholders? That is what corporate democracy is all about, imho.
- Ubique, Tom Termini www.bluedog.net - WebObjects / J2EE SOA / iPhone solutions for knowledge workers
Dear EU,
The word is capitalism. You know it exists although you seem to deny it, believing the free marketplace exists only where retail goods and services are sold. However, the truth is there are many capitalist free marketplaces.
The labor pool is a great example. People are free to seek better and higher paying jobs whenever they like. Employers must therefore compete, offering better conditions and pay or else accept the dregs of society that they will end up with representing their companies to the public. I think we can guess what companies like Uber and Walmart have decided?
Another capitalist free marketplace is the market of governments and taxation. It's pretty clear that the governments of the world are in a deep, bury-your-head-in-the-sand inner circle of denial, but the fact remains that the various states in the USA and the countries around the world compete against each other to get private companies to locate within their borders.
Why else would Microsoft, a company based in Washington, create a subsidiary in Nevada with which they declared billions of dollars of software licensing income some years ago? It's because Washington is hostile to private business and charges heavy taxes on software licensing, but Nevada charges sales taxes only on goods and services sold in Nevada. Their tax rate for all transactions outside the state is zero percent. To illustrate the level of denial governments are engaged in, the State of Washington was actually SHOCKED that Microsoft did this. SHOCKED, I tell you! And yes, this is the same Washington that made Boeing run away, finding a safer operating environment and better tax climate in the capital of government corruption, Chicago, Illinois!
And was it a big surprise that Apple created a subsidiary in Ireland? When that didn't quite work out they created (and possibly invented) the "stateless entity" to legally pay zero percent taxes.
And so, dear stupid EU, the reality is that you are competing against all the other states and countries for the tax dollars from the profits earned by private industry, whether you are willing to admit it or not.
In order to compete, you'd better start LOWERING YOUR TAXES, you dumb asses, or even more companies will run away. Whether they run away or not, all of them are actively looking for ways to get around your oppressive taxes.
And if Brexit wasn't bad enough! You idiots are risking the entirety of the EU if you don't pull your heads out of the sand. The EU continues only as long as your member nations are happy and more prosperous as a result. Once it becomes clear that you're making things worse for everybody and stalling the European economy with your excessive regulations and tax structure, more members will start dropping out.
Summing up: you're the government. You CANNOT be this stupid. Change your ways, give your people freedom, lower your taxes, and more or you risk losing your empire at the hands of the same people you were supposed to be taking care of.
If it's a business... it can be and must be taxed. Thanks.
"It is no measure of health to be well adjusted to a profoundly sick society." - Jiddu Krishnamurti