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UK Announces Digital Services Tax on Tech Giants (itproportal.com)
Technology giants will have to pay more tax in the UK under new regulations unveiled by the local government today. From a report: In his budget statement this afternoon, Chancellor Phillip Hammond revealed a two percent "digital services tax" on large tech firms such as Amazon, Facebook and Google. From April 2020, large social media platforms, search engines and online marketplaces will pay a 2 percent tax on the revenues they earn which are linked to UK users. The tax follows increasing pressure from both the public and politicians to take action against multi-billion dollar firms paying low rates of tax in the UK. Both Google and Facebook have been criticised for paying little taxes in previous years, largely by centering their UK operations in Ireland to avoid higher charges. Revealing the tax in Parliament, Hammond said that it will be, "carefully designed to ensure it is established tech giants -- rather than our tech start-ups - that shoulder the burden of this new tax."
If you don't pay for anything, there's never any tax! Bazinga!
Ok m8, a chav nicked me ad revenue!
It's becoming increasingly difficult to compute taxes for multinational corporations. Country B may not allow Country A to see enough info to compute a fair tax. It may be just easier to tax revenues instead of "profits", because money coming in and out of your own country is easier to monitor than trying to figure out what companies do and spend in other countries.
Table-ized A.I.
So Google makes corporate net income from ad revenue based on UK users. Presumeably pays corporate income tax on that, yes? To which country? Ireland currently?
Is this going to be double taxation?
Where are we going and why are we in a handbasket?
I guess the UK government is looking for emergency revenue sources now that the rest of the economy is going to be going away.
Where are we going and why are we in a handbasket?
I wish they'd do something like this in the United States, with revenue being used to aid small businesses that are at risk of going under.
Who is doing the linking, the companies themselves?
I really do enjoy paying more for goods to compensate for taxes imposed by corrupt and/or moronic governments.
Why are just some of the tech companies being targeted? I notice that Apple wasn't included in this list and they are one of the biggest users of these tax dodges. Starbucks is another. If you are going to go after companies that are playing loose with the rules then why not go after all of them?
Ah, that explains why suddenly a ton of YouTube videos went briefly to "Payment is required" today.
100% on target. Revenue tax avoids the many thousands of ways large companies manage their profits for tax purposes.
Focus on the business of producing product not on the myriad of tax writeoffs for earnings management - personnel costs, G&A, depreciation, goodwill, borrowing money from a subsidiary in low tax country X and paying them back in high tax country Z, ....
Top line revenue tax makes more sense and reduces the % of corporate spending just for tax compliance.
Technology giants will have to pay more tax in the UK under new regulations unveiled by the local government today.
It is a bit odd to call local a nation state's government. Is there a global government that oversees UK "local" government?
If government services were optional and the taxes paid to cover those services I wouldn't have a problem with government (providing they weren't otherwise abusing people like they currently do). However not everybody is interested in being deprived of assets for the supposed benefit of services they may not need or even want. One can be charitable without subscribing to a fundamentally flawed socialist system.
Basic economics suggests companies are going to go where its cheapest to operate from. The UK only has jurisdiction over those in its territories and the moment that the UK makes it untenable for Google and others offering digital services to operate in the country due to high taxation they are going to get the fuck out. Right now Google likely has operations in the UK to sell advertising- but its not necessarily the case that they have to have operations in the UK to do this and so they will likely close operations and sell off assets if its more cost effective to do so. The UK is going to have to walk a very fine line here if they expect to successfully extract more money from Google and others like it.
If "successful" this will likely drive up the cost of goods as advertising those goods will go up. That will lead to higher prices on goods that are already twice as much in the UK as in the US. This will lead to a further deterioration in the quality of life of UK residents. People in Europe in general don't fully appreciate just how much worse off they have it than elsewhere. When everything costs twice as much your effective income doesn't go anywhere near as far as your 'equivalent' elsewhere.
The UK might make a judgement against Google claiming it owes millions, but if Google doesn't operate in the UK, and the company has no assets there to seize then the UK government will fail. The only way they will succeed is if they can get other countries like the US to enforce the UK judgment. Good luck with that. It's hard for me to imagine the US enforcing a UK judgement against a US entity that doesn't operate in the UK. The world just doesn't work the way you socialists want it to.
What you should be doing is reducing the cost to operate a business in the UK to attract business. That will help prop up the economy. Provided you don't tax your citizens to death as is currently the case they can make the most efficient use of there income to purchase the goods and services that are needed rather than the goods and services that government thinks its citizens need. This government approach results in waste and inefficiency because people take what they can get rather than what they need and then the individuals don't have the resources to buy what luxuries they want.
It reminds me of how some countries are funding babysitting because the middle class has become so impoverished as a result of taxation and waste its people can't afford to hire there own babysitters. It's so bad that if you don't go along with the program you get shunned by the rest of society. That's how insane socialism gets and really that is just the start of it. Eventually you will run yourself into the ground just like Russia, Venezuela, and other socialist countries. And before you go off and say "but I'm a democratic socialist and that is different" let me remind you that your "half" socialist policies still have the same flawed impact even if its to a lesser degree. So you might not be starving like the people in Venezuela, but you will still be impoverished to a greater degree and poorer than those in freer equivalently resource rich regions. There is a difference between banning pollution and mandating laws providing equal market access and regulating companies for the sake of "protecting people" from things they can already protect themselves from by simply not doing business with bad actors. What is more concerning to me are government regulations and laws that put many of the monopolies and duopolies into power in the first place with ill-though anti-free market regulations. That is why there are only two i
This will backfire in so many ways.
First of all these companies already pay VAT as any other company. Now they have to pay 2% plus. Who do they think they will charge this surplus to? Hint: It's NOT the shareholders.
So we'll see higher prices for all things tech. Thanks Morons!
Next, every time governments introduce new taxes, some laywer will find a way to avoid paying. So be ready to see lots of new contrived company structures that will legally avoid these taxes. More legal fees, less innovation. Thanks again Morons!
Many years ago the UK introduced Insurance Premium Tax at 2.5% in 1993 as insurance premiums were exempt from VAT. It now has a standard rate of 12% and a higher rate of 20%. The VAT rate is 20%. This measure at 2% of revenue is not the end. Future governments will see how effective collection is and how the public responds to it. I would not be surprised to see it rise to near Corporation Tax levels but without the neat tax offsets. The companies that appear to have avoided being affected ? Watch next years budget, especially after Brexit.
cue the 'oh noes! taxes!' sociopaths...
I enjoy having paved roads, fire protection, police protection, working traffic signals, safety standards at work, etc... You know the stuff that civilized societies have.