5 ms·
OK, I'll add another 'no' to you both. If a company is operating in a certain country offering goods and services to the population of that country then that co
by junto 11y ago
OK, I'll add another 'no' to you both. If a company is operating in a certain country offering goods and services to the population of that country then that country has the right to levy taxes upon the sales of those goods, and upon the operating profits of that company operating within that country.
Global corporations fiddle this by moving money around so it appears that they don't make a corporate profit in that country, hence they pay no corporation tax. For example, companies like Vodafone continuously buy other companies that are making losses deliberately to offset their profit making mobile operators.
A simple way to solve the problem is to levy an internet sales tax, which is the same percentage as the corporation tax that these companies should have paid if they were operating solely in that country in the first place.
This would have some added advantages to companies that have bricks and mortar stores, who currently struggle to survive and compete with online competition. They provide the customers advice and the ability to try on their goods and then the customer price compares and buys cheaper online.
Whilst customers are benefiting from lower prices in the model we have today, we face the real risk that in twenty years you will only be able to buy a book from Amazon. There won't be any other book store.
- derefr 11y ago> A simple way to solve the problem is to levy an internet sales tax, which is the same percentage as the corporation tax that these companies should have paid if they were operating solely in that country in the first place. Ah, but how does something like Google work, then? They don't sell a product to people all over the world (where tax can be collected); people all over the world are the product, and they sell that product to advertisers mostly from the US. Google uses the population of a country to make money without actually receiving any money from anyone in that country.
- junto 11y agoGoods and services. In terms of their core business, the money they charge British companies to advertise on the Google network should be taxed and paid to the UK government. I don't understand the problem?
- benzoate 11y agoBecause corporation tax is a tax on profit. Profit is roughly revenue - expenses. How do you ever reliably calculate Google's expenses for the UK? It's basically always going to be a pseudo made up number between total world wide expenses and 0, and shockingly they declare the highest number they think they can get away with.
- 1stop 11y agoNo, if there are no expenses in the UK, then their UK revenue IS ALL profit. If their US company is wearing all the expenses then they get a tax saving there. They are trying to have their cake and eat it, and declare expenses in high tax regions and profit in low tax regions. Hence Ireland being popular. It's not complicated unless you actively start trying to move money around to avoid tax, which is what they all do.
- deleted 11y ago[deleted]
- junto 11y agoYou've missed my point. There is no point in levying a profit based corporation tax. I'm suggesting a straight internet sales tax, similar to VAT, rated to raise a revenue comparable to what the country is missing or on in terms of corporation tax.
- cballard 11y agoPeople are not the product. Advertising is, and it's sold somewhere and served from somewhere.
- ksec 11y agoBut you need to take into account how much some countries are charging for cooperate tax. A stupid insanely huge amount! You have sales tax, then this company invest into the country and hire people, paying rental for stores, advertising and spending. Once you take away all that, the country has to take 35% of your profits? The case for Apple isn't as convincing as they are the most profitable company in the world. What about company that operate on laser thin margin? As most company are these days. I am not again Tax, but it needs to be fair and reasonable. And in most cases it is not. As per your example, how about Vodafone, or many other SME who invest their profits into property market, driving up the cost of property which are every days needs for people in their country, and yet does not pay a single dime of tax.
- 1stop 11y agoNo it doesn't need to be fair or reasonable, if you want access to the market - pay the tax. Simple. If you don't think it's fair or reasonable, don't enter the market. Kind of like saying "I'll only play monopoly if I don't have to pay anyone elses rent, but you pay mine".
- ksec 11y agoWhat you are saying is perfectly correct until no one on the market is actually paying their part. Why should other company follow to give themselves an disadvantage?
- junto 11y agoThe point is to level the playing field and de-power the global corporation. They have now become more powerful than countries and I see that as a problem. It means that they can overpower democracy, which we are seeing more and more through the corruption of our politics.