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Three European Countries Block Tax On Tech Giants (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: French Finance Minister Bruno Le Maire's efforts to rally his European Union colleagues around a new tax on tech giants fell short, as countries skeptical of the plan doubled down on their opposition, and others, including Italy, said they'll push ahead with their own plans. Ministers from Denmark, Ireland and Sweden said they couldn't support the tax in its current form, casting doubt on the proposal's future, since unanimity is required to pass taxes in the EU. The plan on the table would impose a 3 percent levy on the European sales of the likes of Amazon and Facebook. A number of countries are already imposing taxes of their own, increasing the risk of fragmentation in the single market. Finance Minister Giovanni Tria said an Italian tax will kick in next year if there's no broader agreement by then. Spain and the U.K. have already announced their own levies.
In Europe they tax you on the number of symbols you use in your equations. That is why he came up with e=mc2. It wasn't correct, but cheaper because it was so short.
This arena never existed before. Politicians don't want to tax it to balance the budget. They want to tax it to have another wad to spend and then apppend the current borrowing on top of it.
The rhetoric will remain the same, which is that, in spite of times being better than ever before, the dire needs of The People are more severe than ever before.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
you can't tax something that can move out of the nation and out of the EU.
Tax needs a captive product/service that has to stay in that nation.
Low taxation is what attracted US brands to parts of the EU.
When the EU places new tax the same US brands will just look for better tax rates globally.
When the only attractive offer to stay in a nation was a low tax rate, don't remove the one thing keeping a brand in your nation.
Domestic spying is now "Benign Information Gathering"
My guess is that he wanted to avoid taxes that equal money times the speed of light squared...
Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it.
You already tax the tech giants. If there are tech giant employees in your country, then you likely tax their income. And if product sales occur within your country, then that is also taxed. But this new tax isn't about that. Instead it's about taxing the companies no matter where they are located. High tax countries are upset that large tech companies have avoided them, and so they're barely getting any tax money. Some countries are willing to be tax-competitive, and are rightfully worried that if the EU collects taxes no matter where a company is located, then the companies will probably move to some other country, thereby causing the country to lose a large amount of corporate tax.
Let me get this right ... before they were making X and now they'll be making 0.97 X. But they'd rather have 0 X?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Wouldn't make much of a difference if they go elsewhere.
With the exception of Amazon they do not create jobs on Europe anyway. And Amazon jobs are pretty shitty minimum wage jobs.
So you've got no money passed down to workers that could redistribute it in the local economy means that the local markets don't benefit from it. This also means no income tax from workers means that the governments don't get their cut, which they can put back into the social security systems.
You shouldn't be surprised that such countries try to tax companies that do business there as globalism isn't always the best thing for domestic industry.
Trump understands that as well. Although his approach lacks elegance, it aims for a similar thing. Namely bring your assets to my country, create jobs in my country, or fuck off.
In this case, it's the tax-competitive country losing money. The tax-competitive country currently collects X. The new EU tax will collect 2X no matter where the company is located. The company moves most of its key employees and tech jobs to the United States, leaving behind a skeleton sales crew to collect sales. The sales group moves to another country with warmer weather. The tax-competitive country gets 0 X, the country with warmer weather gets 0.25 X, and the EU kleptocrats are left scratching their heads wondering "Why don't we have enough money or jobs?" UNLESS the tax-competitive country tells the EU to shove off.
Actually, these are all examples of taxing you. Bad habits don't pay taxes. Those that engage in them do. As far as the tech giants, its the owners, workers and customers that are paying the tax. The concept that we call a tech giant, or actually any corporation, can move* at the drop of a hat.
*Which brings up an interesting question. How does a corporation like Apple move the 'nexus' for business receipts from the USA to Ireland? If I move any sort of money, property or security across the US border (in excess of $10,000 in value), there are forms to fill out and taxes to pay. When the order to relocate business operations moved from the USA to Ireland, probably in the form of a memo, that memo had an imputed present value of billions of dollars. Did they file the appropriate paperwork? Pay the duties?
Have gnu, will travel.
"If there are tech giant employees in your country, then you likely tax their income."
Nope that is exactly the problem this suggestion tries to solve*. The company only pay income tax in the country of origin. So even if a company from Ireland(Google for example) sell stuff in other eu countries, all their income tax is paid in Ireland.
*It's still a horrible solution, but I do at least understand why the current system is problematic.
If there are tech giant employees in your country, then you likely tax their income.
Nope that is exactly the problem this suggestion tries to solve*. The company only pay income tax in the country of origin. So even if a company from Ireland(Google for example) sell stuff in other eu countries, all their income tax is paid in Ireland.
So if I moved to Germany and worked for Google, I wouldn't have to pay any income tax at all to Germany? It's all paid to Ireland even though I don't live or work there?
That just sounds *very* different to me.
Here in the US we have to pay tax to the federal government and to both states, the one you reside in and the one you work in.
Some states have agreements with others, usually near by intended for people that are close to the borders.
In those cases you just pay the state you live in the full amount, and the two states figure out their shares between them.
Otherwise we need to do two state tax returns as well as federal (and sometimes city, but that's residential based)
The company moves most of its key employees and tech jobs to the United States, leaving behind a skeleton sales crew to collect sales.
Uhm, that isn't how it works today.
The skeleton crew is currently located in the tax haven. The workforce is where they can pay the lowest wages which is somewhere else.
At the moment the skeleton crew is in Ireland since that minimizes taxes while still being in EU.
Ireland benefits from this since while the taxes are absurdly low they are still paid in Ireland.
By harmonizing the taxes all over EU there is no real benefit for companies to place their paper HQ on Ireland, but they can't move it out of EU if they want to do business there.
You idea of what is currently going on doesn't seem to be founded in reality.
Different small countries in Europe have always had to have different ways of making a living or find themselves feeder economies to the bigger countries. The EU has provided them with a fairer playing field or at least opportunities to take advantage of opportunities. The tech giants have exploited the entire world's inability to keep up with their fancy tax minimisation schemes. Some of the smaller countries have exploited the resulting anomalies as opportunities.
France has long harboured the desire to get more tax from the tech giants and gain economically. They want to do this on an EU basis, however this is largely a self serving zero-sum game of taking from others in the EU. The smaller countries don't want to do this and point out that the problem is world wide - if higher taxes are introduced on FANG and other tech giants only in the EU then likely there will be fewer tech giants basing themselves in the EU and less innovation.
The OECD is taking a world wide approach to dealing with the issue of fair taxation of tech profits. The OECD intends to report in 2020 on this. Probably this will result in a fairer system assuming that the US would be dictator can be bought off. France wants to change the frame of reference to the EU where they can more easily push their agenda.
Now there will be a battle of wills. France's position is strengthened by Britain's idiotic exit from the EU.
And if product sales occur within your country, then that is also taxed.
which is why they book all the sales throug Ireland regardless of where the sale is made in some absolute sense.
But this new tax isn't about that. Instead it's about taxing the companies no matter where they are located.
Yep!
High tax countries are upset that large tech companies have avoided them
No, this is 100% false. The large tech companies are not avoiding the "high tax" countries at all. They're doing tons of business there and making use of all the benefits of being in a high tax country but are using accounting tricks to avoid taxes.
Literally no one is trying to tax companies that have avoided the country in question. But that's using the real definition of avoid as in "aviod" not the definition you use which seems to be exceptionally dependent on tax law and accouting intracies.
Some countries are willing to be tax-competitive,
That's a bullshit term.
SJW n. One who posts facts.
If Amazon, Facebook and Apple decide not to operate in the UK then their tax burden in the country will indeed be zero.
Right now they do operate in the UK, they just don't pay a sensible or reasonable level of tax on the profits they make here. I think pay up or fuck off is a perfectly acceptable demand from the Government.
Where the jobs are has been, is and will continue to be entirely fucking irrelevant.
Where the revenues are generated and profits made is the key factor and companies are generating a lot of revenue and profit in the UK then using international tax laws to pay pitiful levels of tax there. That's why the UK is stating that this is not an acceptable way to operate and that an additional tax will now be levied.
Lets face it, Twitter and Facebook don't exactly have high UK employment to start with.
That's tax on your income, not Google's.
Of course, that was the question asked and being answered.
If there are tech giant employees in your country, then you likely tax their income.
That's why I questioned the answer given, as it didn't make sense.
Long story short, in EU you can choose to pay income tax either in your country of residence or registration country of your company. Social security tax is the one which must be paid in country of residence.
Interesting, thank you for that explanation.
Put that way it doesn't sound all too different from here then, other than the usual location type swaps (fed to eu, state to country)
I got the impression it was always income tax paid to the country the company is in.
But of course no government could stand to have taxes be so simple!