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.

Comments

Turnover tax?

[SultanCemil]

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.

Re:Turnover tax?

[goose-incarnated]

I'm not arguing that "$FOO isn't considered deductible" where $FOO is "driving to work", or "buying a suit for work".

I'm arguing that it should be deductible. You are presenting the way the world works - but I already know the way the world works and I'm complaining that it is unfair. You have not addressed the unfairness, you have only reiterated (multiple times) that this is the way things are. I already know the way things are.

My argument is, if a company can deduct every single one of its expenses as a cost of business, it is unfair to prevent individuals from deducting their cost of maintaining employment. Right now, I cannot deduct the cost of maintaining employment, proportionally or otherwise, which gives businesses an unfair advantage - their tax burden is lighter than mine.

I'd be fine with deducting a proportion based on the proportion used to maintain employment. Having to maintain a minimum hygene standard to maintain employment would let me deduct part of the water bill. Having the need for business attire to maintain emplyment would let me deduct the cost fo the suit (who uses a tie unless its for business? Weddings, maybe? Funerals?). Hell, a portion of the car repayment (I don't have one, but still) would be deducted.

Right now none of the costs incurred in maintaining employment are deductible. That is unfair, when businesses have all of their costs deductible.

As far as revising the definition, I did not mean "You revised the definition you previously presented", I meant "You are presenting a new definition for the word PROFIT that differs from what it actually means in both english and economics", which is that which is left over after costs have been subtracted fom revenue.

Profit has never meant anything to do with production, and I don't recall seeing your definition in any of the economics textbooks that I've had the misfortune to read. I also don't recall seeing your definition anywhere else. Regardless, even if we settle on your definition, the systems as I stated it are still unfair, as I stated above.

If you want to tax only the profit, then go ahead and tax only the profit, but do it fairly for everyone. If you want to tax the revenue, then go ahead and tax only the revenue, but do it for everyone.

If (as the TFA says) countries want to tax based on revenue, then their decision is logically sound - they are already taxing their citizens on revenue, why not tax companies on revenue too?

Watch the mergers

[Harlequin80]

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.

Will be interesting if some just drop out.

[Ungrounded Lightning]

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.

Re:Will be interesting if some just drop out.

[b0s0z0ku]

Europe would be better off without American giant corps siphoning off its residents' data. The world survived for all but the last few decades without those cloud crappers, Europe will be just fine without FB/Google/Apple/Amazon.

Re:A special tax?

[slew]

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.

You forgot what these companies did with that money which was sitting in the "bank" (not a literal bank account, but cash equivalent holdings).

The companies used the money to back bonds sold in the USA. The companies effectively virtually move the money to the states (by borrowing the money from the bond investors) at a rate far lower than if they had to pay tax on that money by repatriating the money.
  This was because since the risk on the bonds was perceived to be low, they discount they had to apply was low (bonds had ~2% yield vs a 20% tax rate).

If I was a shareholder I'd be screaming bloody murder for a dividend. A fucking big dividend.

Why would an investor want a large dividend that they would have to pay tax on? It is much more efficient for the company to save 10x the tax rate than for the investor to pay taxes on dividends as long as the stock price is reflecting this savings. The only reason companies issue dividends is that they have no better use for the money, but saving 10x the tax rate on virtually repatriated profit is a good reason to not issue all this profit as a dividend.