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Is the EU tax based on revenue instead of profit? Or is basing it on revenue in this instance just supposed to make the "percentage paid" smaller to make FB an

• deleted 9y ago
  [deleted]
• MarkCole 9y ago
  I believe the article is just poorly worded in that regard. > "It says that Google pays taxes worth up to 9 percent of its revenues outside the EU" They're simply asserting that Google currently pays 9% of its revenue in taxes outside of the EU. I don't believe they are calculating their lost tax revenue that way. To answer your question in the EU corporate tax is yes based on profit. Your revenue minus your expenses.
  • newen 9y ago
    Not really. The idea is that they are hiding their profits, and so their profits are not being taxed. But the actual profit (as a percentage of the revenue) that they are hiding is expected to be similar inside and outside of the EU.
• friendzis 9y ago
  Directly mentioned in the article: “Facebook’s taxes as a share of their revenues recorded outside the EU is between 28 percent and 34 percent, whereas in the EU this is a remarkably low ratio of 0.03 percent to 0.10 percent,” the report adds. Profit numbers are very susceptible to accounting gymnastics. EBITDA and revenue, on the other hand, are more difficult to manipulate. If you make assumption that companies in the same domain have similar operations, then profit margin, and by extension taxes paid on reported profits, should be similar. Based on this assumption, one can say that it is worth looking into when companies in the same domain have significantly different reported profit margins or reported profit margins differ significantly based on location. Tax to revenue ratios in this case differing by two orders of magnitude raise some eyebrows.
• themihai 9y ago
  It's based on profit.