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?

[Anonymous Coward]

Thank Hollywood accounting for that. There are just so many times you can piss on the system until someone gets fed up.

Re:Turnover tax?

[oldgraybeard]

Bankruptcy is done according to the law. Throwing out the Trump part. The only thing wrong with having a company Bankruptcy on your financial record is, if you do not pick your self up and try to start a business again!

And no I don't have one on my record, and I have 2 businesses.

Just my 2 cents ;)

Re:Turnover tax?

[jrumney]

Maybe the companies should have thought about that before trying to game the rules against the interests of the people who make the rules.

Re:Turnover tax?

[MtHuurne]

That's just a risk of doing business. A tech company with losses so heavy that it cannot pay a ~2% turnover tax likely wasn't going to survive without paying tax either.

Besides, if I understand the article correctly, this is an offer to the mentioned four tech companies as an alternative to thorough legal probing into their tax avoidance constructs, so they're free to reject it. And as far as I know all four are making a profit.

Re:Turnover tax?

[Zaelath]

That's the American way for sure; privatising profits and socialising losses.

Most of the banks here require Director's Guarantees, because sure, there's no shame in failing, but you shouldn't be able to do it for free.

Re:Turnover tax?

[93 Escort Wagon]

Maybe the companies should have thought about that before trying to game the rules against the interests of the people who make the rules.

There's an old saying - "it takes two to tango".

But it's nice to know that enlightened European companies never try to take advantage of loopholes in the various European countries' tax laws.

Re:Turnover tax?

[oldgraybeard]

So do you see the same for personal bankruptcy laws? Personalizing profits and socializing losses.

And yes, I am aware that certain personal debts can't be dealt with in bankruptcy. But there are losers in personal bankruptcy. When individuals walk away.

Re:Turnover tax?

[Zaelath]

Being an undischarged bankrupt as an individual is a much different outcome to bankrupting an LLC.

Re:Turnover tax?

[PopeRatzo]

what if the company makes a real loss and can't pay the tax?

If one of those four companies makes a "real loss" and can't pay the tax, then there's either 1) a bigger problem than the tax, or 2) the company is lying about how much they're making.

EU has the right idea. Tax these multinationals until they learn to behave. Then tax them some more so they don't even think about fucking around again. After that, keep them on a real short leash.

Now if only we could get governments to do the same thing with billionaires. It would save a lot of bloodshed later.

Re:Turnover tax?

[Darkling-MHCN]

On companies as successful as these companies I think it's an awesome idea ! There's no way for them to weasel their way out of a tax on turnover.

If it seems a bit harsh, so is avoiding tax for decades whilst making profits off of people who need schools, hospitals and are facing retirement into poverty!

Re:Turnover tax?

[tsa]

You probably never heard of those cases but the EU has fine quite a few big European companies for billions of euros because they broke the laws too.

Re:Turnover tax?

[Dog-Cow]

None of the four companies are breaking any tax laws. Or, at least, they aren't being accused of such. Even the Apple case in Ireland was a complaint agains the government of Ireland, not against Apple.

Re:Turnover tax?

[serviscope_minor]

There's an old saying - "it takes two to tango".

A large number of old saying are stupid.

But it's nice to know that enlightened European companies never try to take advantage of loopholes in the various European countries' tax laws.

The EU fines and cracks down on Euopean companies all the time. But when they do it to an American company, it's met with a huge outpouring of whining on slashdot.

Re:Turnover tax?

[goose-incarnated]

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.

Seems like a great idea - these are the companies pushing hardest for social justice "to ensure equality". Make them pay an equal percentag share of the taxes.

Re:Turnover tax?

[goose-incarnated]

On companies as successful as these companies I think it's an awesome idea ! There's no way for them to weasel their way out of a tax on turnover.

It's also a lot fairer that taxes are calculated the same for everybody. Why is it that companies get to subtract their costs and pay tax on the result while individuals are taxed on revenue, not profit? To add insult to injury, in addition to only get taxed on money that they were not able to spend, the companies get a lower tax rate than individuals too.

Re:Turnover tax?

[Freischutz]

Maybe the companies should have thought about that before trying to game the rules against the interests of the people who make the rules.

There's an old saying - "it takes two to tango".

But it's nice to know that enlightened European companies never try to take advantage of loopholes in the various European countries' tax laws.

Plenty of European companies try to do that. If you had bothered to run a few basic web searches you would have found that out inside of five minutes. To cite just one example the German intelligence service obtained bank data detailing tax evasion of German citizens and organisations and a shit-ton of people and companies ended up having to pay up. Speaking as a European: 'Two thumbs up!!' I'd be just fine with every European intelligence service receiving funding for a permanent department who's only job it would be to use cloak and dagger methods to extract data on tax cheaters from tax havens. It's just a lot easier to punish European companies based in Europe for tax evasion in Europe than it is to punish American companies based in the US who are doing business in Europe through European subsidiaries that are often just post office boxes in Ireland or Luxembourg. This has less to do with jurisdictional issues than it has to do with politics since the US uses its diplomats and its '800 pound gorilla' status quite aggressively protect its big corporations. Now that Trump has not only decimated the state department but also created a hostile climate between the US and it's core allies in Europe, this opportunity is now being seized to make US companies pay up who previously enjoyed US political cover. To be fair to the Americans, under a US administration that is (a) competent and (b) rational and (c) not being run by a bunch of corporate lobbyists (and that is a jab at more than just the Trump admin.) there might actually be a chance of creating some reciprocal agreement between the US and EU aimed at cracking down on tax evasion by American and European corporations as well as leaning on the various tax havens both inside the US/EU and outside of their territories. If American corporations are doing business in Europe they should pay taxes there, if Mercedes Benz is building cars in Alabama and selling them to US customers the citizens of Alabama and the wider US should get the tax revenues from that trade. Unfortunately we now have an administration in the White House that is not only incompetent but actually seems to be imploding as we speak and that is downright hostile to the very concept of corporations and rich people paying any taxes at all. Therefore there is no chance of any work on such a project beginning until the day after Trump is impeached at the very earliest and even then the odds are slim until we get a Democrat or a sane Republican in the White House who thinks corporations should not be tax exempt. Unfortunately that seems extremely unlikely to ever happen.

Re: Turnover tax?

[sonamchauhan]

...Software AG.

Re:Turnover tax?

[Njovich]

Lots of countries have revenue taxes. You should price your products so that you can afford to pay it. To answer your question, if you cannot pay your debts you go bankrupt.

Re:Turnover tax?

[herve_masson]

The way I see it is as an acceptable tradeoff for GAFAs. They would not be taxed as much as the next guy, but that's a way to make de deal quickly (read: within the current electoral mandate). If GAFAs oppose this offer, I suspect a future version would be less favorable.

Something 100% certain: people here in EU (myself including) are sick of tax evasion that cost EU countries fortunes, raise my own taxes & creates unfair competition. This situation is solely due to an obsolete tax system, that needs a deep change. Trump has his own "way" to implement "america first"; I much prefer the EU way, that target "fair business", and not some stupid and dangerous "EU first".

Fom my understanding, the "spirit" of taxation intend to tax goods where they are used, and profit where they are made. Digital economy should not be otherwise solely because "the web is global". Damn, the EU is stupid enough to allow internal unfair competition in its own members (you know, this dell that gives me Irish invoices while I'm buying from FR); I'm glad they start to cleanup this mess (well, for now, it's just words... we'll see). People in EU are starting to vote extremes because of this situation, and that scares me.

Living is EU/FR cost a lot in taxes ? yeah, sure, Tell me about that ! I live in a country that love burning cash for bad reasons (bad), but provide great public service in the mean time (great). If I decide to change that, I have a voting ticket. But before this happens, every one need to pay their fair share when operating in this country.

My one cent anyway :)

Re:Turnover tax?

[DigiShaman]

I'm an American, and I agree. When doing business in a foreign nation, don't bitch! Don't like it? Pack your marbles and go home. It's Europe, not America. FFS, why are people so obstinately stupid when it comes to conducting business or other activities in a foreign nation? You're a guest at that point. People, stop being so stuck on stupid. Ditto for when Europeans conduct business in America, or China, or Africa...or....

Re:Turnover tax?

[mjwx]

Maybe the companies should have thought about that before trying to game the rules against the interests of the people who make the rules.

There's an old saying - "it takes two to tango".

But it's nice to know that enlightened European companies never try to take advantage of loopholes in the various European countries' tax laws.

They try and then get smacked down hard... every few years someone forgets and get another smacking. It must be nice living somewhere where corporate interests are treated better than citizens.

I'm sure the EU have a nice name for this tax but it's really the "tax for not paying your tax, tax".

Re:Turnover tax?

[Luckyo]

To quote one of the major local business owners, "if you can't make your business profitable after paying all relevant taxes and fees, you need to look at your business idea. You're doing something wrong".

Re:Turnover tax?

[jellomizer]

The trade-war has begone.
As countries are getting more nationalized they are seeing foreign countries as a risk, so they are doing as much as they can to milk as much from the imports as possible until they can setup their own competition.
As of right now Europe doesn't really have a big name in Software Services. Siemens is the biggest one, but they are not as much a software services as an industrial manufacturing company like General Electric is in the United States. But it is mostly software services that support the industrial services. There is aren't any real big names in European Software companies.

Re:Turnover tax?

[cascadingstylesheet]

There's an old saying - "it takes two to tango".

A large number of old saying are stupid.

European people use the services and European laws allow the tax strategies.

How exactly are two not tangoing here?

Re:Turnover tax?

[bluefoxlucid]

Why is it that companies get to subtract their costs and pay tax on the result while individuals are taxed on revenue, not profit?

Because a business purchases productive output from other businesses, pays wages to workers who produce, and keeps the remaining revenue as profit. Thus the worker produces, and his wage represents the productive output; the suppliers also produce, and so the cost to the business to purchase that input is their productive output; and, of course, the business's profits are tied to nothing except the productive output of the business (which is the same productive output as the business's employees).

That means taxing corporate net profits and not their expenses taxes production: if a table is made, taxing the worker's wages and the corporate profits both of the table manfuacturer and all involved suppliers (including the truckers shipping those supplies) at a rate of 10% gets you 10% of the market price of a table. By taxing strictly and effectively in this manner, an average effective tax rate of 10% collects 10% of GDP and represents 10% of all goods and services produced and sold, in the long run.

Taxing corporate revenues ("gross profits"), on the other hand, double-taxes wages at the end of the pipeline; and far more than double-taxes supply everywhere else. This means the more suppliers you have in a chain, the heavier your taxes, and the higher the effective tax rate applied to a product.

Corporate revenue taxation heavily-favors monopolies, notably vertically-integrated monopolies as per Andrew Carnegie.

Re:Turnover tax?

[bluefoxlucid]

Ireland abandoned its revenue tax because it's illegal in the EU.

Re:Turnover tax?

[goose-incarnated]

Because a business purchases productive output from other businesses, pays wages to workers who produce, and keeps the remaining revenue as profit. Thus the worker produces, and his wage represents the productive output; the suppliers also produce, and so the cost to the business to purchase that input is their productive output; and, of course, the business's profits are tied to nothing except the productive output of the business (which is the same productive output as the business's employees).

Understood

That means taxing corporate net profits and not their expenses taxes production: if a table is made, taxing the worker's wages and the corporate profits both of the table manfuacturer and all involved suppliers (including the truckers shipping those supplies) at a rate of 10% gets you 10% of the market price of a table. By taxing strictly and effectively in this manner, an average effective tax rate of 10% collects 10% of GDP and represents 10% of all goods and services produced and sold, in the long run. Taxing corporate revenues ("gross profits"), on the other hand, double-taxes wages at the end of the pipeline; and far more than double-taxes supply everywhere else. This means the more suppliers you have in a chain, the heavier your taxes, and the higher the effective tax rate applied to a product.

I understand all that perfectly well. It doesn't explain why corporates get taxed on profit while individuals get taxed on revenue.

Corporate revenue taxation heavily-favors monopolies, notably vertically-integrated monopolies as per Andrew Carnegie.

That doesn't explain why individuals are taxed on revenue while corporates are taxed only on profits. How is me selling my labour different from a company selling their collective labour?

When an entity is taxed on revenue (regardless of whether that entity is incorporated or not) then that entity will have to adjust their spending behaviour to compensate for the tax on revenue. The entity receives $100, then that entity must be $10 (assuming 10% tax). As individuals we adjust our spending to pay that tax. As corporates we subtract the cost of existing (paying all the bills) and only pay tax on what is left.

I'm curious why my cost of existence is not exempt from taxes the way a corporate's cost of existence is exempt from taxes.

Re:Turnover tax?

[Dragonslicer]

Why is it that companies get to subtract their costs and pay tax on the result while individuals are taxed on revenue, not profit?

In theory, individuals also get deductions so that they're only paying taxes on "profit" instead of gross income. And in theory, there's no difference between theory and practice.

Re:Turnover tax?

[tippen]

That means taxing corporate net profits and not their expenses taxes production: if a table is made, taxing the worker's wages and the corporate profits both of the table manfuacturer and all involved suppliers (including the truckers shipping those supplies) at a rate of 10% gets you 10% of the market price of a table. By taxing strictly and effectively in this manner, an average effective tax rate of 10% collects 10% of GDP and represents 10% of all goods and services produced and sold, in the long run. Taxing corporate revenues ("gross profits"), on the other hand, double-taxes wages at the end of the pipeline; and far more than double-taxes supply everywhere else. This means the more suppliers you have in a chain, the heavier your taxes, and the higher the effective tax rate applied to a product.

I understand all that perfectly well. It doesn't explain why corporates get taxed on profit while individuals get taxed on revenue.

Evidence would suggest otherwise...

Re:Turnover tax?

[cascadingstylesheet]

Grr, messed up the quoting.

Re:Turnover tax?

[bluefoxlucid]

I understand all that perfectly well. It doesn't explain why corporates get taxed on profit while individuals get taxed on revenue.

So, I stated that taxing corprations on profit taxes actual production, while taxing people on income also taxes actual production, and you don't understand why this is done?

All individual income is profit. Corporate net profits are the same thing as individual gross wage income.

How is me selling my labour different from a company selling their collective labour?

A company's "labor" is its net operating profits. The rest of the "labor" being sold by that company is your labor. The revenue essentially floats through the company to the producer--the worker.

I'm curious why my cost of existence is not exempt from taxes the way a corporate's cost of existence is exempt from taxes.

Because your "existence" is only consuming resources and doing nothing productive. When you go out and work, you produce. Your labor, thus, is productive. This is also why we categorize things like dividends as unearned income (Dividends are taxed at the corporate profit rate, then distributed to the wealthy shareholders and taxed again at the capital gains rate, so that 15% personal income tax some big executives get is actually taxed at around 50%--businesses don't pay income taxes on wages, so it's 0%+individual on wages versus 35%+15% on dividends).

A business's profits are a sort of declaration by the business that it, by its existence, also "produces" through the mechanism of organizing labor in a more-efficient manner than labor would otherwise self-organize. Its expenses aren't its consumption; rather, the act of expending is productive, as it expends for business purposes to transform inputs into outputs through the organization of labor. Part of that expending is wage; part of it is that some other business does some of the work, thus incurring some of the expense, and transfers the intermediate product to the business.

Again: taxation in this manner makes the income tax roughly reflect a slice of GDP--of actual production--instead of some imaginary ideal that you can keep picking pockets all over the place because money is magical.

(By the by, businesses actually pay a payroll tax on wages, which current analysis suggests they backshift into lowering wages; the debate is whether they lower wages or raise prices, either of which just makes the employee or consumer pay for it. Payroll taxes suck.)

Re:Turnover tax?

[goose-incarnated]

All individual income is profit.

No, it is not, unless you define "individual income" as "profit".

Profit = income - expenses (unless you're an individual, in which case expenses are ignored).

Re:Turnover tax?

[cascadingstylesheet]

There's an old saying - "it takes two to tango".

A large number of old saying are stupid.

European people use the services and European laws allow the tax strategies.

How exactly are two not tangoing here?

Re:Turnover tax?

[MrL0G1C]

what if the company makes a real loss and can't pay the tax?

Then they will have to apply for bankruptcy just like any other bankrupt firm that's too incompetent to run it's business properly.

Re:Turnover tax?

[bluefoxlucid]

Profit is revenue minus the total operating expense involved in producing a product. Businesses are producing products with labor and materials, and providing the operating environment in which people work; what exceeds that is profit.

Individuals aren't producing a product. They're consuming. You're not creating a productive output, and so you don't get to count anything as an "expense" toward the creation of an output. Even if you renovate your house, you use that house--you're the consumer!

Here's the fun part: if you buy a house, live in it for at least 2 years, and then sell it, the difference in purchase versus sale is capital gains. If you do any home improvement, then the cost you expend on that home improvement is actually deductible as part of the cost basis of your home.

That is to say: you paid contractors, you bought material, and you otherwise expended to produce something that you then sold (you improved the house). Those expenses are not part of your income, and so you take the $200,000 you paid for the house and the $50,000 you paid to redo the kitchen out of the equation when you sell it for $350,000--only paying taxes on $100,000 of capital gains.

So here's the thing: if you repair your house, you're bringing it up to its original condition. You're not producing; you bought the house, you lived in the house, and the house needs maintenance--you are consuming the house by using its useful lifespan. Repairs are just consumption, and not tax-deductible. When the house requires $1,000 of repairs over the course of you living in it, you spend $1,000 to cover what you have consumed. Had you sold (and not consumed) the house, there would be no demand from you for those $1,000 of repairs. Yes it's weird to think about, since the house is going to need repairs over time.

If you're a farmer, you grow food, thus producing. When you eat food, you consume it. Your farm, as a business, has expenses for that food production; and if you use your own food, then the sale value of that food (not paid to your farm!) is essentially paid to you as personal income. This means that if you grow your own food using farm resources, you pay personal income taxes on that food as income; if you use your personal money to buy materials and grow a garden, you pay income taxes on the money you spend for all that, but the food you're growing is not income (it's not originally an asset of the farm, grown by an expense made by the farm, which has been transferred to you as a product of the farm for your consumption).

Chew on that for a bit. Yes, the IRS really taxes farmers on food they grow for themselves.

Re:Turnover tax?

[goose-incarnated]

Profit is revenue minus the total operating expense involved in producing a product.

Really, you just added that qualifier at the end to make the argument work. Profit is *always* revenue minus expenses.

But, okay, let's say that I go with your revised definition, in which profit only exists when there is a product. In this case, the "product" is my labour to my employer - I effectively *am* the product for 8 hours a day, and I am selling myself - why can I not deduct the costs involved in selling myself?

Even if we go with your definition of profit, there is no explanation of why my suit, tie, briefcase and lunch is not deductible. The continued sale of my product (me) depends on transport to and from the employer - why is my transport not deductible?

As employees we don't get to deduct the cost of maintaining employment, whlie businesses get to deduct the cost of doing business. There is no rational explanation for this.

Re:Turnover tax?

[sit1963nz]

Ever hear of Tim Berners-Lee, you know the guy who invented the WWW ? He was NOT an American.

Re:Turnover tax?

[bluefoxlucid]

The very first response discussed the activities and incomes in the course of making productive output. This isn't a revision; it's me repeating the same argument to your face again, and again, and again.

In this case, the "product" is my labour to my employer

Actually, you engage in labor and leisure to produce an output. Your employer deducts your labor because that part of the revenue--the part that pays your wages--isn't going into production effort by the employer, but rather into production effort by you. The output of that effort is the product your employer sells.

As a Candidate for office, I am not legally allowed to use campaign funds to purchase my suit, my tie, my briefcase, and so forth. That would be personal use, and personal use is egregiously-illegal. Funding my travel requires that I show the main purpose of travel was campaigning; note that Congressmen routinely abuse leadership PACs by taking leisure trips and identifying a minor, possibly-political activity as "the political expense" when really they're just taking their whole family on holiday to Scotland, because the rules are severely-broken.

As employees we don't get to deduct the cost of maintaining employment

To do so, you would need to deduct only the proportion of costs invested in your employment, and nothing more. That means you'd have to have special not-for-personal-use work clothes, deduct only the miles used for travel to and from work, and so forth. We actually allow this, but we don't consider time not required at work as "work-related": the drive to and from work (and to the gym, the spa, the grocery store, and everything else you did along the way) isn't tax-deductible.

If you're temporarily stationed at another office instead of your main office, that drive from home to work is actually deductible. If you have a second or temporary job and you commute from one place of work to another (instead of home to work and back), that drive is also deductible.

Moving expenses are also deductible if you move more than 50 miles for a new job. Apparently, we just consider normal commuting as basic consumption.

We don't consider driving to be "performing work for your employer" unless it is incurred by a fact of employment or interactions between employment (rather than as a fact of where you decided to live, in as much as one decides precisely where to live): the conditions of your employment must dictate some deviation at an endpoint (your office is somewhere else today, modifying your commute by a temporary measure put forth by your employer; or you must be at employer A and then at employer B and so your employment fully determines the length of your commute). If your endpoint is fixed--you have a permanent office location--then you determine the commute by renting an apartment closer or farther away.

More-correctly, your employer has about zero determination over your commute in those conditions, and is affecting your capacity to determine your commute in the others.

Your initial premise--and the manner in which you frame your function as an employee--seem to aim for a dialogue that suggests everything you do supports your existence, and your existence is wholly impactful on what you produce, and therefor you have zero income and should not pay taxes. It's one that's been tried by tax protesters now and then.

Re:Turnover tax?

[Luckyo]

So what you're saying is "drop the world's biggest economic area and force them to develop your competitors".

If you were a CEO of any of such a big company, you'd be ousted in a day. If said ousting failed, you'd slip in a shower and land on some bullets. When billions are at stake, people are very serious about stupidity such as one you espouse.

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?

Re:Turnover tax?

[MachineShedFred]

So maybe instead of levying some specific tax on 4 specific companies, they could change the rules that are being exploited to dodge taxes?

If you don't like the legal behavior, make it illegal and they'll stop. This is the worst kind of fix possible. What happens when a fifth company decides to do the same damn thing, and it goes unnoticed for years?

Re:Turnover tax?

[MachineShedFred]

I was unaware that the EU taxing authority gave two fucks about Slashdot and it's whiners.

Really, I'm surprised anybody gives to fucks about what is posted to this site, except for people squarely in the middle of the echo chamber.

Re:Turnover tax?

[MachineShedFred]

Apparently not any more, but only if you are the EU, and if you don't specific non-EU people using the laws you passed and refuse to change.

Re:Turnover tax?

[Luckyo]

In other words, you're too stupid to realise that this in fact equalizes the playing field, making huge conglomerates pay at least a portion of the fee and tax burden that is laid on domestic companies.

I will simply repeat my previous statement. Stupidity of the grade you're espousing doesn't exist at high level, because people this stupid simply don't survive the competition to take positions high enough.

Re:Turnover tax?

[HyperQuantum]

what if the company makes a real loss and can't pay the tax? There's a reason that we tax profits.

Then why are people taxed based on their income instead of their "profits"? Seems a bit unfair if you ask me.

What if a person makes a real loss, say, because of medical expenses?

Re:Turnover tax?

[Darkling-MHCN]

Yea I think the issue is that individuals can't deduct a lot of things whereas businesses can deduct almost everything. e.g. individuals can't deduct the cost of a home to sleep, whereas a business can deduct the cost of an office.

Try earning an income without having a place to sleep in or eating food, common sense says both are essential for someone to be able to earn an income, however the taxman doesn't see it this way, rent and groceries are not tax deductible.

Re:Turnover tax?

[bluefoxlucid]

Right now none of the costs incurred in maintaining employment are deductible.

You know what? This is a stupid argument; partially because you're right: Trump took away the personal exemption, which in 2017 is $4,050, so right now you're not deductible.

You don't get to deduct that $5,000 suit; you could have gotten a $150 suit at Express. Dry cleaning is bad for suits; you should be using a $25 brush, which will last over a century if cared for properly. You could save water by giving yourself a sponge bath, so those 15-minute hot showers are luxury consumption and not necessary to your job. Food should cost under $2,000/year.

I'm repealing the TCJA anyway.

Re:Turnover tax?

[Anonymous Coward]

You don't get to deduct that $5,000 suit; you could have gotten a $150 suit at Express. Dry cleaning is bad for suits; you should be using a $25 brush, which will last over a century if cared for properly. You could save water by giving yourself a sponge bath, so those 15-minute hot showers are luxury consumption and not necessary to your job. Food should cost under $2,000/year.

Those arguments have never stood up in court, and hundreds of those arguments are made daily in court by men unhappy with the standard that they have to maintain their ex-wives in - claiming that "you don't need this, that is sufficient" has never been a defense against runaway expenditure in a court. It also doesn't address the unfairness aspect, in that corporations don't have to justify their expenses, just prove it.

You're conflating "prove this is an expense to maintain employment" with "justify this expense to maintain employment". My entire argument is that this sort of double-standards is logically unsound. Why is a set of exemptions for corporations deemed necessary to their existence, but individuals don't qualify for those exemptions?

A great way past this is a flat tax on all purchases and expenditure (tax any time money changes hands) with no rebates and exemptions. While tax can be used as a scalpel in forming the economy, all that happens is that, no matter who gets elected, corporations get social welfare programs via lowered tax rates, exemptions from taxes and sometimes even subsidies.

Meh

[Frosty Piss]

This will just give the accountants a new challenge on how to cook the books...

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.

Re:Watch the mergers

[b0s0z0ku]

Till they get slapped in the nose with antitrust action. *bam*

Re:Watch the mergers

[serviscope_minor]

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.

Well, gee, if only there was a plan to tax turnover not profit then.

Re:Watch the mergers

[bluefoxlucid]

No, he's right. If you have an organization that passes a million dollars's worth of steel through a bunch of intermediate suppliers--mine, refine, distribute, shape, etc.--you tax the cost of that steel and all profits made and taxes paid on that steel at every supplier. That first labor and profit get taxed again, and again, and again, each time being paid by different hands, until it finally gets to the consumer.

That means long supply chains geometrically increase the cost of a product, and so vertical integration cuts down your product's costs. The same sort of thing happens with profit margins, really, offset by the fact that profits and taxes paid upstream in the supply chain are deducted off your corporate income tax by way of deducting supply costs as expenses.

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:Will be interesting if some just drop out.

[ScentCone]

So why not just persuade your fellow Europeans not to use these services, and to start their own? Really, why not? What seems to be the hold-up? Is it that it's a miserable place in which to try to run such a business? Yeah, that makes sense.

Re:Will be interesting if some just drop out.

[b0s0z0ku]

Better that some of those services didn't exist at all, no matter who owns them.

Re:Will be interesting if some just drop out.

[ScentCone]

So what you're saying is that Europeans aren't smart enough to not use them? Why aren't they?

Re:Will be interesting if some just drop out.

[Actually, I do RTFA]

It will be interesting if some of these services try just dropping their presence in the countries in question.... Sure it might hurt their bottom line a tad. But it would cause severe pain to the countries' own businesses.

Yeah, it's been really horrible for Tencent, Baidu and QQ that Google, et al have been kept out. China's really suffered, and there haven't been any way to communicate, and they're not keeping all that money and control in their country.

Re:Will be interesting if some just drop out.

[dunkelfalke]

That is really a stupid question.
Most people aren't smart.

Re: Will be interesting if some just drop out.

[Dog-Cow]

The EU has way lower poverty, lower healthcare costs, etc. than the US, which means more people with more disposable income.

That's a non-sequitur. Europeans have those benefits because they pay for them. It does not logically follow that they have more disposable income.

Re:Will be interesting if some just drop out.

[Kjella]

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.

It depends on whether these companies hold something unique or whether it'll basically just be a market up for grabs, in most case it's the latter. It's pretty easy to be China's Google, eBay, Facebook or Amazon if the "real deal" withdraws from the competition. As long as you can give lip service to free market economy while really stacking the deck, I'd say the government wins this one hands down. A government can afford to be sub-optimal, for example after we in Norway gave the Nobel Peace Prize to Liu Xiaobo they put the relation to us in the freezer and kept it there for years. Was there profitable business opportunities? Yes. Could they afford to skip us and just trade with somebody else, even if they weren't the best offer? Also yes.

Take cars for example, there's been threats of import taxes and whatnot. Can Europe do fine with Audi and BMW? Yes. Can US do fine with Ford and Chevrolet? Yes. Can Asia do fine with Hyundai and Kia? Yes. One particular brand of car is entirely expendable. Free trade economists will of course say that's sub-optimal... but there's a long way between that and the Soviet style plan economy. It's a dirty fight which is why there's people trying to make rules... but if involved in a street brawl and not a boxing match I wouldn't play by Marquess of Queensberry Rules. They're for when the other guy is also playing by the rules and there's referees to punish those who don't.

Re:Will be interesting if some just drop out.

[AmiMoJo]

Sure it might hurt their bottom line a tad.

If by "a tad" you mean "billions of Euros profit from a market of 500m Europeans" then yes it would, and I really doubt they would throw that away over having to pay their fair share of tax.

Re: Will be interesting if some just drop out.

[bestweasel]

Europeans pay half what Americans do for healthcare and don't shovel anywhere near the same amount of cash at the military.

Re: Will be interesting if some just drop out.

[bestweasel]

Profit? They are carefully constructed not to make any profit. Where did you hear that absurd and libellous rumour?

Re:Will be interesting if some just drop out.

[thegarbz]

Why not solve world hunger? I mean it sounds easier than convincing even a room of people to agree on anything, let alone a group of countries.

Re:Will be interesting if some just drop out.

[hraponssi]

As I am sure you know, the GAFA have established presence, user base, historical reasons et al. So as long as things are as they are, people will not be changing to some random EU based service.

Now, if the companies would drop their services (as suggested by Undergrounded Lightning above that this thread is started on), this would change it all. Because they would have no option. Maybe the EU would finally get its head out of its ass and start trying to compete globally in IT. Of course, EU has all its bickering issues with cultures, countries, languages, etc. And the GAFA will not go anywhere so this is all just fluffy talk.

China and Russia seem to have found local services perfectly fine. China is going ahead fast too.. As examples of places where the GAFA are not present, they seem to be doing just fine.

Re:Will be interesting if some just drop out.

[thegarbz]

It will be interesting if some of these services try just dropping their presence in the countries in question.

Interesting to the shareholders who will punish the companies doing so severely. The benefits of doing business in an economy of 700m wealthy people dramatically outweigh the cost of doing business.

It's the reason western companies are falling over themselves to do business with repressive regimes, while companies in China are doing their dambdest to get access to America despite the threats of an actively hostile government towards them.

The solution to paying a bit of tax is not to forgo even more profit as a result.

Re:Will be interesting if some just drop out.

[Actually, I do RTFA]

For some reason, libertarians seem to think all businessmen are sitting there, getting angry about taxes and letting spite guide them. As opposed to businessmen sitting there going, "And if I do this, I get 2 new pools at my Aspen guest house".

Re:Will be interesting if some just drop out.

[jabuzz]

The stupid thing is there are no real trade barriers to USA made cars being sold in the EU. At least no more than EU cars being sold in the US that is. There is a bit of import duty both ways. Then there is the fact that if a USA made car is to be sold in the EU it has to comply with EU regulations for safety etc. Similarly EU made cars have to comply with USA regulations, whoopdy do. Now it may be that EU regulations are tougher, but there is *NOTHING* stopping USA manufactures complying with them and the idea that we would in the EU lower the standards that our cars have to comply with is utter lunacy.

No the really issue is that the vast majority of USA made cars are not attractive to EU buyers. Firstly they have awful and by EU standards truly awful fuel economy. With a much higher fuel price in the EU you have to be very well off, stupid or both to want to buy the vast majority of USA made cars. Secondly USA made cars are generally significantly larger than their EU counterparts which with the smaller road sizes in the EU makes them very unattractive to EU buyers. Finally USA cars have a reputation of having appalling handling; namely they don't take corners very well, which with roads being less straight in the EU than the USA makes USA made cars less attractive.

It's like the whole chlorine washed chicken being sold in the EU. There is nothing stopping USA chicken being sold in the EU, you just have to use decent hygiene practices in your abattoirs and then you wont have to wash them with chlorinated water and they will be suitable for sale in the EU. Similarly for beef, want to sell your beef in the EU, thats fine you just have to not inject them with growth hormones and it will be just fine. Heck you can still inject the stuff that is going to the USA market with growth hormones if you want, just the stuff you wish to export to the EU needs to be free of that shit.

We have higher standards in the EU than the USA, why should we drop them so you can export to us? Perhaps that makes it easier for EU companies to export to the USA because due to the higher standards in the EU their products are automatically compliant with USA standards, but that's the USA's problem for having such lack standards in the first place.

Re:Will be interesting if some just drop out.

[Anonymous Coward]

There are a bunch of "digital native" journalism start-ups in Canada struggling to survive. All of these start-ups argue that they are innovating and doing the things the "legacy" newspapers should have done a long time ago to adapt (if it is even possible for them to ever adapt), however the startups are precarious and can rarely thrive due to the stifling effect the huge legacy media organizations exert just by existing, and bleeding money (and lobbying hard for the government to give them more).

Anyhow, the point is that it's extremely difficult (to say the least) now to move into any space already dominated while the incumbents exist, even when the huge incumbents are lumbering, inept, failing messes such as the canadian newspaper establishment. And of course google and facebook, etc, are not failing.

China recognized this and enforced drastically protectionist measures, which is the only thing that allowed its own home-grown versions of youtube, facebook, etc, to flurish. Some of these services chinese "knock-offs" are still pretty poor imitations, but some have really taken hold (like WeChat). Most of the west views the "great firewall of china" ("Golden Shield" as it is officially named) is all about censorship and government control, and there is certainly that aspect to it, but it may be even more about about native protectionism, similar to the way China handles many of its resources.

I'm not advocating China's model, but just showing that the only place in the world where similar significant non-First-Mover-American online services have managed to grow is one which severely limited the the their influence.

Re:Will be interesting if some just drop out.

[cascadingstylesheet]

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.

Then stop using them. Nobody is forcing you to.

Looks like your people want to use them though.

Re:Will be interesting if some just drop out.

[ooloorie]

Europe would be better off without American giant corps siphoning off its residents' data.

I agree completely! Europe would be lovely if it returned to the romantic ideal of pastoral lands with young and healthy lads and gals working the fields and living in quaint villages, ruled over by aristocrats. That's the kind of country Americans like to visit. And it has the additional benefit that Europe won't be able to engage in its old destructive behaviors: wars, genocides, colonialism, etc. I'm glad forward (or backward) thinking Europeans like you want to make this happen. Europe is halfway there already, so if you need some help make it go all the way, you can count on my support.

Re:Will be interesting if some just drop out.

[b0s0z0ku]

Economic mobility index says that the US is closer to a feudal society than most European countries... (higher is worse in this case)

http://www.epi.org/publication...

Re:Will be interesting if some just drop out.

[ooloorie]

Economic mobility index says that the US is closer to a feudal society than most European countries... (higher is worse in this case)

The European plutocracy/aristocracy consists of far too few people to have any effect on intergenerational income elasticity. On top of that, they don't actually usually earn income anyway; earning income is for the little people.

No, what you're seeing in those statistics is something very different. Low intergenerational income correlations are a sign of social dysfunction, of a society that grinds its most talented people into dust and determines salaries and job security based on tenure and collective bargaining, not individual merit. Which is, of course, exactly what Europe does. And you no doubt think it's a good thing.

Re:Will be interesting if some just drop out.

[BlueStrat]

Even if Google et al. end up paying 2 points more in taxes, they still earn a lot of money off Europe. That being said, a lot of money is a lot more than no money.

Even if the EU mandates such taxes, Google et al won't be paying them out of corporate profits, it will be paid out of the higher prices and costs Google et al charges entities in the EU for their services. The EU would simply be taxing it's own people and businesses that use and/or rely on Google et al. Corporations don't pay taxes, they just pass the increased costs along.

Strat

Re:Will be interesting if some just drop out.

[judoguy]

Economic mobility index says that the US is closer to a feudal society than most European countries... (higher is worse in this case)

http://www.epi.org/publication...

So says a left wing "policy" organization. "If only we had more Socialism, life would be good!"

Re:Will be interesting if some just drop out.

[b0s0z0ku]

Libertarian "freedom indices" also show the US slipping... it's not only the "left".

Re:Will be interesting if some just drop out.

[sit1963nz]

The USA is only 4% of the worlds population. Someone else will pick up where these companies leave off, it may not be as good, ever, but then again neither will those companies that left. Try it, see how well any of these companies do if they loose access to 96% of the worlds population and resources.

The USA is NOT the greatest country on earth, no matter what you all yourself. Feel free to explain why it is.
There is no law to say the USA will or must win in all things, because it is not ever been true , not will it ever be true.
The USA is capable of collapse.
ALL those large multinationals can and would leave the USA if it were in their best interest.

A special tax?

[darthsilun]

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.

Re:A special tax?

[Daemonik]

You're overlooking the Golden Rule, son.

HE who HAS THE GOLD makes the rules.

Until he ticks off the one who has the army.

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.

Re:A special tax?

[Ryanrule]

because euro companies depend on euro tax havens.

Re:A special tax?

[Anonymous Coward]

... accounting tricks to launder their profits ...

This is the 'economic value of goodwill' issue again. How does the government determine the licensing fee being charged is fair and reasonable for a parent corporation? The government would need to create a formula to vet every licensing agreement carried by every multi-national: A momentous task demanding a massive amount of political will. That doesn't exist in the USA and if it did, it would be quickly corrupted by legally bribed politicians..

... we didn't pay in the EU ...

Yes, countries offering sweetheart deals to multinationals is an issue but it's no different to the USA demanding a sweetheart deal for all its corporations, called a double-taxation agreement (DTA). As long as first-world countries fight over corporate subsidiaries that in reality, provide minimal benefit to a wealthy country, the people will lose.

... pay US taxes on it.

This loophole makes most of the US taxation laws worthless, not that corporate taxes are burdensome in the USA: Foreign profits are treated as imported goods: It is a rule with the obvious purpose of helping the rich. US citizens can't delay their taxes on overseas income until they return to the USA.

Re:A special tax?

[Anonymous Coward]

One who has more gold can buy a better army.

Google, Apple, Facebook and Amazon made the mistake of not contributing enough to the EU politicians. If they would contribute then they would not need to be bothered with a special tax. I bet the contributions would be much cheaper than the new tax. That is the mistake of forgetting to by the rules.

Re:A special tax?

[AmiMoJo]

The issue here is that they claim to make very little profit due to having to pay crippling fees to the parent company (that is registered in a tax haven) to use the Amazon or Google branding. Starbucks does it too, they buy all their beans from the parent company and pay them licence fees to use the logo and green styling, and end up making near zero profit in EU countries despite having billions in revenue.

So the EU plan is to simply tax turnover, rather than profit. Easier than deciding what is legitimate profit and what isn't. Then they can carry on with their bullshit tax doge licencing fees but the EU still gets its tax take.

It's a nice solution to this problem, because it avoids trying to determine what is legitimate and what isn't, which is where the loopholes are found.

Re:A special tax?

[Anonymous Coward]

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

But if they do, their shares will lose 30% of the value because now the company paid taxes on that money.

Re:A special tax?

[GuB-42]

There are loopholes because tax laws are complex, and tax laws are complex because the subject is complex.
The problem with taxes is that you want the state to get the money it needs, with profitable businesses and some amount of self-reliance. And it needs to be done in an environment where actors are selfish. Furthermore, the law needs a semblance of fairness and respect for more treaties than you can count, you can't just tell Google "pay me 10 billions, because I said so".

Try to close a loophole and you may kill entire industries, half-ass it and you may as well do nothing. There are really smart people in governments working hard trying to fix all that mess. It is an impossibly hard problem even before you account for things like lobbying, popularity and corruption.

Re:A special tax?

[mjwx]

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?

That is what the EU is trying to do. The problem is they need to differentiate between the companies that are using licensing to arrange a Dutch/Irish sandwich and the companies who are genuinely spending money on licensing and fees to overseas companies in order to simply operate. The only fair way to do this is to identify the abusers of the system and punish them, starting with the biggest, most prolific abusers so they can be held up as warnings.

Re:A special tax?

[houghi]

Most shareholders do not give a fuck about the dividends. They care about selling the shares for more than they bought them for. Not getting a divident means the company has more money and thus increase the values of the shares.

Re:A special tax?

[cascadingstylesheet]

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.

Er, just to play contrararian, don't Cayman Island banks invest their deposits in stuff?

Re:A special tax?

[Anonymous Coward]

Easy, you simply outlaw those kinds of licencing agreements. What does society gain by having one company pretend to be another in the first place?

Re:A special tax?

[ooloorie]

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?

The US already has higher corporate taxes and a world-wide tax regime, and that's why these profits stay with shell companies. So the US isn't responsible for this at all. This is purely an intra-European issue right now, where European jurisdictions compete for taxing profits of American companies.

Of course there is an easy and correct fix: the US should lower its corporate taxes to far below European taxes, and the profits should be taxed almost exclusively in the US, since the US created the infrastructure necessary to build these companies.

Re:Justification?

[cheesybagel]

If it were FB et. al, I'd disconnect it all off for a day - see how that goes down. That would be hilarious.

The Russians and Chinese seem to do fine without it.

Evaders will evade

[NuclearCat]

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?

Re:Evaders will evade

[Computershack]

No problems, just Google will not accept payments directly, for example, and create MicroGoogle France, who provide service surprisingly similar to theirs.

You quite clearly don't actually understand anything about the subject. MicroGoogle France is who they're trying to tax.

Re:Justification?

[b0s0z0ku]

Yep, Britain enjoys being the lackey of US corporate interests while the rest of Europe (justifiably) pushes back.

Re:The American Tax

[b0s0z0ku]

Better than the Reagan/Trump way of letting the commoners have crumbs. Have you priced US health care vs that in most of Europe? European countries are doing an admirable job of taking care of their own citizenry compared to the US.

What is

[oldgraybeard]

a turnover tax?

Re:What is

[slew]

a turnover tax?

Basically a tax on revenue and/or capital appreciation, so it's similar to a Sales Tax, except that is collected from the company internal revenue. That makes is a bit analogous to a Value Add Tax in that it taxes the company in a way that doesn't allow it to subtract expenses (like an income tax).

Re:What is

[oldgraybeard]

OK, it is a value of sale, sales tax so the company just passes it right through to the consumer. I am good with that. The EU(All Government) does like taxing things that move to death. And if it moves again you tax it more. When that industry is collapsing/dead the tax is at the right level.

Re:What is

[HiThere]

But how does this apply to Google and Facebook? I can understand how it works when you're selling something that is persistent, but not how it works when you're giving away something that isn't persistent. Is it per web page loaded or what?

Re:What is

[innocent_white_lamb]

Revenue from sale of advertising (and any other services that are sold for money).

Re:What is

[PolygamousRanchKid]

a turnover tax?

It's also called a "bend over" tax.

. . . any questions . . . ?

Re:Justification?

[MightyMartian]

Yes, it's so darned arbitrary to try to find ways to prevent tax avoidance. And since Britain is almost certain now to remain in the Common Market, it will have to abide by the rules, but seeing as it is no longer an actual EU member, will have little or no say in those rules. 52% of Britons who voted to Brexit were either simpering morons or fooled by a pack liars.

The Anti-American Trade War has Begun

[SmaryJerry]

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.

Re:The Anti-American Trade War has Begun

[moronoxyd]

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.

European companies that break the law are fined similar amounts all the time. It's just that people like you don't hear about it, because it doesn't involve American companies/people so it's not "important".
Google "e-on gaz du france fine" for one example.

The EU isn't going after American companies. It's going after companies that break the laws. Which is something America should do, too.

Re:The Anti-American Trade War has Begun

[tsa]

No, the EU is working for its citizens. It fines European companies just as hard as American ones. What does the American government do for its people?

Re:The Anti-American Trade War has Begun

[Anonymous Coward]

allow them to hoard guns ?

Re:The Anti-American Trade War has Begun

[moronoxyd]

GP was making a generic statement not directly related to the story from The Register. (Note that he refers to statements he made years ago.)
So my answer was refering to that, not to the story.

Re:The Anti-American Trade War has Begun

[moronoxyd]

Well, it's just funny how they've singled out American companies. I thought protectionism was wrong? Apparently it's only wrong when the Americans do it.

And I'm sure that's the only explanation possible. It reason could never be that the American companies try getting around paying their taxes in the EU in ways that companies who have the headquarters in the EU just couldn't do.

access to the enormous American market to dump their goods

Oh, so this is a one-way street? Are there no American companies that dump their products in the European market? So Coca-Cola, Microsoft and the likes are European companies?

Re:The Anti-American Trade War has Begun

[Computershack]

Europe has grown up with American subsidies, free defense provided by American taxpayers

Actually if anything that has cost us money because during the cold war between the US and USSR it made us primary targets. I live within 3 primary targets of the Cold War and they were all USAF early warning radar bases. We didn't actually need them, we had our own.

Re:The Anti-American Trade War has Begun

[HornWumpus]

Check your history. You NEEDED them.

And Microsoft has a sad...

[bruce_the_moose]

...because they aren't in the same group as the "Big Boys". Samsung too.

Re:Justification?

[NoZart]

as someone in europe, i would love for facebook to close shop for two weeks (a day wouldn't be enough, i think) - it would be so glorious watching the zombies shuffle around not knowing what to do.....

wut tho?

[slashmydots]

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.

Re:Justification?

[tsa]

That would hurt FB a lot more than it would hurt its users.

You know what this REALLY means?

[93 Escort Wagon]

It’s the year of Diaspora on the desktop!

Understanding EU policies

[Max_W]

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.

Re:Understanding EU policies

[mjwx]

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.

The EU isn't inviting in people from 3rd world countries, it's simply the easiest place to be smuggled into due to a large land border and the Mediterranean. Most of the refugees are legit, coming from war torn countries (in no small part to US and EU actions in the region). The EU is trying to organise things but they're facing opposition from ultra-nationalist elements within the EU.

Its similar to the US/Mexico border but about 500 times larger.

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.

This is because in the EU you're not permitted to lie in advertising. DJI were caught doing this (by the FCC first) about the range of their drones but the FCC didn't prosecute them. The EC did, DJI decided to be dicks about it and put in the warnings, IIRC they're easy to bypass.

Re:Understanding EU policies

[HornWumpus]

Europe doesn't know shit about immigration. 500 times larger? Numbers of immigrants/year says you're full of shit.

At least some of the Eurotrash are awake now, less self righteous lecturing about beaners now. Give it 20 years (at 2016 flows) and they will actually start to understand.

Re:Understanding EU policies

[angel'o'sphere]

For example, encouraging immigration into EU from the 3rd world countries while nothing is organized in place
We don't do that. Why would we? Europe is overcrowded with people.
Perhaps check immigration laws. It is close to impossible to immigrate to Europe. Even Canadians, americans or Australians will have a wall of paperwork.

OK, I could understand 1500 meters, 1000 meters, but why make it practically unusable?
Because there is no reasonable reason that you spy on your neighbors 2km away.

Re: Watch the armchair financial "experts"

[Harlequin80]

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.

Re: The American Tax

[b0s0z0ku]

Life expectancy in UK > that of the US. And if you get sick, you're not saddled with medical debt.

Re:How is this different to dictatorship?

[guruevi]

Welcome to Merkel's Europe. My grandfather used to say, whenever a German is in charge the organization starts looking like the Third Reich. He was complaining about his HOA in Spain but he was quite right, dictatorship and an air of supremacy still runs in Germany's ethos.

Re:How is this different to dictatorship?

[SciCom Luke]

At least politicians had the guts to make decision, in the Third Reich period. The wrong decisions, obviously, but now they are just going with flow, only from time to time annoying their voters with some small things, to remind them of their presence, which is also wrong.

There is no Anti-American Trade War

[SciCom Luke]

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.

Only 4 companies?

[joncombe]

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?

No one is going to "drop out"

[mjwx]

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.

Re:No one is going to "drop out"

[angel'o'sphere]

The minute that Apple or Facebook pull out of the EU, the EU revokes all of their patent, trademark and copyright protection.
There is no law that would allow for that.

Re:Justification?

[Cederic]

52% of Britons who voted to Brexit were either simpering morons or fooled by a pack liars.

Ah, the line trotted out by people that don't understand why people voted to leave and project their own ignorance instead.

since Britain is almost certain now to remain in the Common Market

The Common Market no longer exists, so it's not going to be possible to remain in it. But carry on believing and spouting utter bullshit, it's what I've come to expect from people that voted to remain.

Re:What is turnover

[moronoxyd]

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.

They are not as "portable" as you think. How do they make money? By selling ads.
Where do they get ads? From companies that see a potential to make money from the user of Google's or Facebook's services.
What companies are that? Companies that operate in the market that these users live in.

So to monetize EU users, Google and Facebook need to sell ads to companies in the EU.
To do that effectively they need to operate from the EU.
So, no, neither Google nor Facebook will leave the EU, as they would lose an ad market of 500 million people.

Socialism

[rickb928]

It's expensive.

Re:Justification?

[Computershack]

YAnd since Britain is almost certain now to remain in the Common Market.

No it isn't. The UK is definitely leaving both the single market and the customs union. Prime Minister May stated that very slowly and very clearly and repeated it as part of her 45 minute speech on Brexit this week.

52% of Britons who voted to Brexit were either simpering morons or fooled by a pack liars.

Still waiting for the year long recession, 520,000-800,000 job losses and 10% house price drop we were told would happen following a vote to leave.

Re:What is turnover

[HornWumpus]

EU companies do business with overseas entities all the time. The eurotrash will next try to make these business expenses non-deductible.

Re:The American Tax

[ooloorie]

European countries are doing an admirable job of taking care of their own citizenry compared to the US.

Oh, I think the European model would be a significant improvement for the US. Of course, what that actually means is raising taxes on the middle class by 50% and cutting back medical services massively. But that's what it takes to balance the budget. It's also

Re: The American Tax

[ooloorie]

Life expectancy in UK > that of the US.

True: being afraid of going to the doctor is an excellent way of scaring people into living a healthy lifestyle. After all, the difference in life expectancy between the US and the UK is not due to the quality of medical care in the US (which is superior) or its availability (nearly universal), but to lifestyle choices: obesity, drug use, violence, etc.

And if you get sick, you're not saddled with medical debt.

Unless, of course, you decide that the UK public health system doesn't cut it and you need to get treatment in the private sector after all.

Re:This probably will violate trade agreements

[imrahilj]

Specifically naming the organizations in the law is going be particularly susceptible to problems.

^ This. The targeted corporations can and will take the EU to court and they will win hands down because this taxing is discriminatory. If, on the other hand, they taxed all companies operating in the EU in the same fashion then they wouldn't able to be challenged.

Except - they aren't forcing the companies to pay this tax. They are encouraging them to pay it, with the threat of making life hard for them if they don't. That seems like it would be harder to challenge.

Re:The American Tax

[b0s0z0ku]

"Cutting back medical services" doesn't mean reducing quality of services -- it means things like having to share a room in a hospital or wait for elective procedures. Note that the UK isn't a good model -- France or Germany are.

My cousin just had her second baby in Germany. In the US, they'd kick you out with a few-thousand dollar bill after less than a day. She ended up paying virtually nothing other than her state insurance, and stayed long enough for them to make sure the baby was nursing well, didn't have jaundice, etc.

Private insurance companies are far more efficient at cutting services while squeezing their victims (patients) for all they have than governments or heavily government-regulated insurers.

Re:Justification?

[angel'o'sphere]

52% of Britons who voted to Brexit were either simpering morons or fooled by a pack liars.
Both actually. The liars left office already and back pedaled.
On top of that are the idiots who only voted for fun for the BREXIT because they thought it would never happen anyway, or who wanted to hurt someone in the government.
Now most want to revert it, and vote again. But somehow they fear the "they let us vote until they like the result" mantra.
OTOH again: the vote is not legal binding. There was not any action required by the new Prime Minister. The final vote will be done by the parliament anyway. And when the parliament says Niet, then they are shit: open exit talks with the EU on article 50, and the EU proceeding to kick them, while the parliament has voted not to exit.

And the Prime Ministress is to pride to accept that she is riding a dead horse. Just put the article 50 on hold or cancel it and if you think it is worth it, make a re vote.

And then: fix your damn problems inside of your country.

Re:How is this different to dictatorship?

[angel'o'sphere]

And nevertheless the EU is run by the EU parliament and not by the German Chanceloress.

Re:The American Tax

[ooloorie]

Note that the UK isn't a good model -- France or Germany are.

Germany has an all private insurance system; part of it is heavily regulated, the other part is more free market.

it means things like having to share a room in a hospital or wait for elective procedures

It also means not receiving life saving procedures if you are deemed not valuable enough by the state, and it means having to pay for a shitload of drugs out of pocket.

My cousin just had her second baby in Germany.

Germany is facing a demographic catastrophe; that's why they pay massive amounts of money for women to have birth. In different words, this isn't representative of medical care in Germany in general.

In the US, they'd kick you out with a few-thousand dollar bill after less than a day.

I wish they did, because that's what an insurance plan actually should do. But instead, many US plans cover births.

Private insurance companies are far more efficient at cutting services while squeezing their victims (patients) for all they have than governments or heavily government-regulated insurers.

Private insurance companies operate under the conditions set for them by markets. In the heavily regulated US system, they maximize profit by cutting services because their patients are forced to pay them no matter what. In a free market system, patients could actually vote with their dollars... and their feet.

Re:The American Tax

[b0s0z0ku]

(1) Germany is semi-private. They have state-run insurance as well, and the private market is heavily regulated (as it should be).
(2) As opposed to not being valuable enough to your insurance company? Plenty of Americans are denied care, and more were denied before the ACA kicked insurance companies into shape.
(3) Birthing services are cheaper in most of the world than the US. And the US doesn't even have much to show for it, considering infant/maternal mortalities are high by developed-world standards.
(4) Agreed, "insurance" is a misnomer. Everyone should have medical "coverage", so as to not have to worry and stress about planning for catastrope
(5) Not really. They'll just screw their patients in event of a catastrophe. Not like many people in the process of recovery from being hit by a truck are in the mood to litigate.

Re:The American Tax

[ooloorie]

(1) Germany is semi-private. They have state-run insurance as well

That's incorrect.

Plenty of Americans are denied care, and more were denied before the ACA kicked insurance companies into shape.

The ACA is a crony capitalist scheme to forcibly transfer even more money from rate payers to insurance companies, drug companies, and special interest voting groups. It did nothing to fix the US insurance market.

If the US wanted a British-style public health care system, it could do that tomorrow, without any changes to the US private insurance system: the US Medicare/Medicaid budget is already large enough to cover every American at UK rates.

People like you are the kinds of useful idiots that keep the current, unsustainable, inefficient crony capitalist system in place in the US. I hope you rot in hell for it.

Re:The American Tax

[b0s0z0ku]

I agree about the ACA in principle and agree that a UK/Aus/Canadian style public system would be best. ACA was at best a short-term compromise -- if the goal was for it to fail and a public system to take over, I applaud that goal.

So... EU sales tax at 3.9%? ...

[kefalonia]

... that would pretty much sum up the announcement!

Re:The American Tax

[ooloorie]

You are right that Obama's goal was to sabotage and make the private system in the US fail. But that goal wasn't motivated by creating a workable public system. Obama didn't need to destroy the private system in order to create UK-style public system, he could have done that out of the existing Medicare/Medicaid budget. Destroying the public system was motivated by the Democrats' desire to take even more money away from tax payers and hand it to their wealthy donors and special itnerests.

And the Democrats never intended to create a UK-style public system, which would have involved either making doctors public employees or substantially cutting their salaries; what Democrats intended--and you basically admitted it--was to continue having a hugely overpriced private delivery system financed by forcible expropriation from taxpayers, mainly the young and skilled workers. Creating a UK-style public system was never seriously on the table because neither doctors, nor insurers, nor patients want it (patients look at the public system we have, the VA system, and run in horror).

You're the typical useful idiot who serves the Democrats, their crony capitalist schemes, and their billionaire donors. Congratulations. Hopefully, I'll be dead before people like you succeed at destroying the US completely. When Hillary spoke of a "basket of deplorables", she obviously was referring to people like you.

Re: Not as expensive as capitalism

[rickb928]

Thanks. I needed a laugh right now.

And, it's past... Darn, that didn't last long.