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Europe Plans Special Tax For Google, Apple, Facebook, and Amazon (theregister.co.uk)
An anonymous reader quotes a report from The Register: Bruno Le Maire, France's minister for the economy, has revealed that a plan to levy a special tax on Google, Apple, Facebook, and Amazon will soon be revealed by European authorities. Le Maire told French newspaper Le Journal du Dimanche "A European directive will be unveiled in the coming weeks, the minister reveals, and it will mark a considerable step forward." The minister told the paper that a tax of between two and six per cent has been considered, with the proposal to be "closer to two than six." The proposed tax will be levied on the four companies' turnover, rather than profits. Taxing turnover is hoped to offer a simple way to tax the companies, as all use legal-but-cynical ways to minimize their taxable income. Le Maire added that a turnover tax is seen as being quick to implement and that the four companies know they're going to have to pay more tax in Europe, so may be amenable to such an arrangement.
Seems like a horrible idea - what if the company makes a real loss and can't pay the tax? There's a reason that we tax profits.
Cemil.
This will just give the accountants a new challenge on how to cook the books...
If you want news from today, you have to come back tomorrow.
Because they have "les lobbyistes non pareil".
There is now a huge incentive to merge your organisation. There will be an active push now to drive down revenue while holding profit levels the same. The best way to do this is to create massive verticals.
Something else that shows why Britain wants out of the EU. Arbitrary and pointless BS like this.
What they are wanting to do is get around the special tax accounting that FB et. al take advantage of in Ireland. EU will probably to justify this with "because they can" and "being fair and equitable" - the former is not good enough, and the latter never is if it's taxes.
EU is trying to play poker with a pair of deuces, when everyone else is holding a flush or more.
If it were FB et. al, I'd disconnect it all off for a day - see how that goes down. That would be hilarious.
It will be interesting if some of these services try just dropping their presence in the countries in question. Close any offices, shut down any data centers, not take adds from or sell services to any operation in the country in question.
Sure it might hurt their bottom line a tad. But it would cause severe pain to the countries' own businesses.
Trade wars usually consist of both sides shooting themselves in the foot. But they can consist of shooting the other guy in the leg while only blowing off a couple of your own toes. It would be interesting to see a trade war like event where one side is a multinational corporation rather than a country's government.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Why don't they all (U.S. included) just fix their existing tax laws so that these companies can't use loopholes and accounting tricks to launder their profits through countries like Ireland that give them preferential tax treatment?
Oh, we have an office in Ireland. We sold $100M in Ireland and $10B in the rest of Europe, so we'll just use a bookkeeping sleight of hand to claim all that revenue in Ireland and pay Ireland cents on the Euro. Then we'll "park" all those profits, and the money we didn't pay in the EU in a Cayman Islands bank so that we don't have to bring it into the US and pay US taxes on it. We'll just leave it sitting there indefinitely..
But it's an asset on their books, so they're happy and their share holders seem to be happy/
Actually what is good about keeping $100B sitting in a Cayman Island bank? I'm sure it earns interest and all. But it's just sitting there.
If I was a shareholder I'd be screaming bloody murder for a dividend. A fucking big dividend.
No problems, just Google will not accept payments directly, for example, and create MicroGoogle France, who provide service surprisingly similar to theirs.
Or they think those behemoths will give up on their billions just like that?
It's called "let's leech off of successful foreign businesses!"
Why doesn't Europe have their own companies that can complete?
a turnover tax?
This smells of violating trade agreements because they're basically saying they are going to target foreign entities via a type of trade barrier/duty even if they arne't calling it that. Specifically naming the organizations in the law is going be particularly susceptible to problems.
How interesting.
I already mentioned years ago on this very site that the EU fines and rulings against American companies were outrageous in comparison to worse and greater offenses made by European companies. This is just the next step, just tax a company simply for being American.
There will be an active push now to drive down revenue while holding profit levels the same.
This is much easier said than done. Profit = Revenue - Expenses, so if you want to keep the profit the same while decreasing the gross revenue (aka turnover), then that means you also have to reduce your expenses. So your comment is basically "if you tax on the gross, then companies will have an incentive to become much more efficient!" While true, that's also basically something you'd expect Captain Obvious to say.
The best way to do this is to create massive verticals.
Bzzzt. Wrong. This is not how you reduce expenses.
Hey look everyone, it's out of touch guy who claims the most talked about relevant companies in the world are "irrelevant"! He's a close cousin of "Microsoft? Pfft, who uses that!" guy and "TV? Nobody watches TV" dude.
...because they aren't in the same group as the "Big Boys". Samsung too.
To reduce crime, make fewer things against the law.
Are they naming this the "go back to America and give them taxes instead" rule? Because that's what they're doing. Whatever, it closes the loophole so I support it.
Just stop it, you "Hey look everyone, it's out of touch guy who claims the most talked about relevant companies in the world are "irrelevant"! He's a close cousin of "Microsoft? Pfft, who uses that!" guy and "TV? Nobody watches TV" dude."-guy.
Sounds like they're optimizing around the problem rather than fixing the problem - that these tax schemes these companies use, however "cynical" remain legal.
It’s the year of Diaspora on the desktop!
#DeleteChrome
I have a hard time understanding some EU initiatives. For example, encouraging immigration into EU from the 3rd world countries while nothing is organized in place. So that people have to sleep in parks, walk over the mountain passes without proper equipment, etc.
Or dumbing down the DJI quad-copters. The range of the DJI Spark in the US (FCC) is 2000 meters. In the EU (EC) it is 500 meters https://www.dji.com/products/c... . In reality it is even less, at about 200 meters the warnings began to appear on the screen that the video signal is too weak.
OK, I could understand 1500 meters, 1000 meters, but why make it practically unusable?
So I would not be surprised if they make the Amason and Goggle unusable either.
No not quite.
At the moment lots of organisations use 3rd party providers to generate business for them. We call them brokers or agents. Those agents increase your revenue through increasing sales, but also reduce your margins. This isn't a bad thing for business as those brokers and agents are generally better at it than you are yourself.
So the maths becomes, does acquiring the broker reduce our profitability by more or less than the 2%ish saving on tax on turnover.
At this point in time the tax is only targetted at these mega corps, so there isn't the incentive to integrate with suppliers. If the tax is rolled out to all firms then you will see massive mergers as that 2% is applied at every level of the sales chain.
no, no, no. Europe is a landmass. The EU is planning "special taxes"
n/t
I mean, picking on specific people or companies because you want to?
Rule of law means you pass general laws which apply to all people and companies equally.
When you start making *specific* laws, for specific people or companies, you are simply forcing them to do as you say, because you want to (popular, get money) and you can (police, jail).
If you start doing that for these specific people, what's to stop you doing it to *me?*
My only protection is that I'm one tuna fish in a huge shoal of tuna fish.
That's not freedom.
Google and Facebook are portable
They do not have to have a physical presence in the EU.
It would not be in the EU's interest for them to leave.
So taxing their portable operations in the EU would be dumb.
(Which does not make it impossible that that is what the EU is planning.)
They do sell adds to companies in the EU.
Their customers are less portable.
Is that the 'turnover' being taxed?
Well, the EU politicians did not know fast they had to hump America's legs when TTIP was announced, so it was not nearly as bad as you think.
Are they really planning to pass a law that applies only to 4 named companies? Why not all companies? I can see that ending up in the courts as anti-competitive if they do. That or Google, Facebook, Amazon and Apple will set up a new company with a different name to avoid the law. And what about other companies doing similar. Starbucks springs to mind?
It will be interesting if some of these services try just dropping their presence in the countries in question. Close any offices, shut down any data centers, not take adds from or sell services to any operation in the country in question.
Sure it might hurt their bottom line a tad. But it would cause severe pain to the countries' own businesses.
But they'll never do that because:
1. They're making too much money.
2. They're making too much money.
3. They're making too much money.
4. They rely on legal protections to keep making that money.
5. They will give the market to their competition.
The EU is worth more than the US, I've got to love that American fantasy that companies will simply up sticks and leave profitable markets because they have been asked to pay their tax. Remember that the reason Google left China wasn't that it was unprofitable, it was that the Chinese government continually changed the laws against Google. The minute that Apple or Facebook pull out of the EU, the EU revokes all of their patent, trademark and copyright protection.
Calling someone a "hater" only means you can not rationally rebut their argument.
It's expensive.
deleting the extra space after periods so i can stay relevant, yeah.
Europeans failed to catch the internet train, they failed at developing online business, they just sat on their asses and waited. And now they want money for nothing. Europe == past.
The whole point of taxing corporate profit rather than income is so that paying their own workers lowers taxes for the company. Take this away and you'll simply see employee income go down to compensate as the incentive is removed. Then 10 years from now you'll just ratchet up the individual income tax another notch.
interesting
... that would pretty much sum up the announcement!
By claiming subsidiaries as sole repositories of required materials or licensed works to avoid any profit, despite high profits, the companies have shown that there's a good reason to tax turnover. Don't like it? Blame starbucks, apple (triply so all of Hollywood) and so on for their avoidance of tax by "creative accounting" of profit.
I have to pay for food. Without a home i can't get a job, without food I can't survive to work. I have to get to work. That costs too. So why can't I take those out of my "revenue" I get for my labour (wage)? Stop saying I can't and say WHY.
And, no, there is a way around copyrights. Abuse of copyright means you lose it. Just "work to rule" and all digital goods, being encrypted therefore not usable as learning material (a required quid pro quo before the work goes to the public domain), means it is not expressive and therefore not liable for copyright ACCORDING TO THE RULES AS WRITTEN. Of course, by "common practice", they are, but then again they (and you) are trying to get the letter of the law where it helps them.
Expensive for you, that is. Propaganda makes you hope to be one of the ones at the top, however, so you think you are temporarily disadvantaged AND that it is "socialism's" fault.
Because you're not a high information voter.
I expect goods bought through Amazon in the EU will have a price hike to help alleviate the pain of paying this 'tax' bill.
Likewise, the others will charge EU companies a little more for advertising on their platforms.
So all in all consumers will be paying the difference. - Not that it makes much difference, since we're already making up the shortfall by not getting the tax.
I expect the hordes of lawyers fighting this and arguing the case and the accountants coming up with even more clever avoidance schemes are already rubbing their grubby hands with glee over this.
I've never understood why Facebook is considered a tech company. It has more in common with the tobacco, alcohol or snack food industries -- it pushes a consumer-discretionary product that is designed to be addictive.
To be considered a tech company, shouldn't it have to create and sell some form of technology rather than just use it to run its business? Even if you don't agree with that argument, airline companies probably use more tech than Facebook does, so why aren't they considered tech companies, too?
Lastly, now that Zuckerberg is in his mid-30s, does he really think he can still pull off that brogrammer image that he's worked so hard on creating?