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Ah! If VAT is not a tax, and Google's operations inside the EU doesn't contribute to EU coffers, you must be all for moving Google's EU subsidiaries offshore, a

Ah! If VAT is not a tax, and Google's operations inside the EU doesn't contribute to EU coffers, you must be all for moving Google's EU subsidiaries offshore, and saving whatever VAT Google's customers pay? Google recorder $40B in EU revenues in 2017. About 20%, or $8B was the VAT related revenues that EU received. Let's move all that away from the EU, since it's all one big non-tax. Also, let's abolish VAT, as my "ignorance of how VAT on business expenses actually works" is being exploited by big-evil Google for tax avoidance. Everyone knows that paying VAT is the #1 way to reduce tax liabilities, translated, "let's all pay taxes on transactions, as a way to avoid taxes on income! Hurrahs all around for the genius CPAs". VAT is an evil tax on revenues (transactions), that sellers conveniently pass on to the buyer. Whether you agree or not, every seller is also a buyer, and VAT merely increases the cost of doing business, while also effectively acting as a double-taxation ploy, as profits are subject to income taxes. Who ends up footing the VAT bill is immaterial, as VAT goes under "costs" that were previously $0, unless you're a company that buys nothing to sell something. And whether it's booked as "costs" or not, it's a tax that the government receives on transactions under it's jurisdiction. Buying ads from a US company as a US transaction doesn't incur a VAT cost on an EU company, hence, Google's EU presence is a net positive for EU coffers!

notahacker 8y ago
I suspect that Google ceasing to do business in the EU would be considerably more harmful to Google's revenues than to the EU (actually that whole argument works better the other way round. If Google is truly struggling to make any profit at all on all that investment they make in the UK, why don't they just leave?) Please do yourself a favour and educate yourself on what VAT is before you Dunning-Krugersplain what the EU wants from it, how much you think it is worth to the economy and what you think an accountant would recommend a business does (I can recommend a good search engine as a starting point!). The entire point of VAT that it's a tax on the consumer of the final product only, and that businesses get to deduct all the VAT levied on intermediate goods they've purchased to make and market the final product. That's literally the most basic, definitional aspect of VAT that sets it apart from traditional sales taxes. Since Google Ads are bought almost exclusively by businesses, EU member states (the EU doesn't actually levy VAT itself) receive a net tax benefit from VAT paid on Google Ads only on ads bought for personal enjoyment or by VAT exempt organizations, which must be a tiny proportion of their sales. Now there's an argument that Google's customers' customers would buy fewer taxed goods and services if they didn't see the ads, but that's a very different argument and certainly not something you could object to journalists not counting as "government income from Google's operations"

notahacker 8y ago

I suspect that Google ceasing to do business in the EU would be considerably more harmful to Google's revenues than to the EU (actually that whole argument works better the other way round. If Google is truly struggling to make any profit at all on all that investment they make in the UK, why don't they just leave?) Please do yourself a favour and educate yourself on what VAT is before you Dunning-Krugersplain what the EU wants from it, how much you think it is worth to the economy and what you think an accountant would recommend a business does (I can recommend a good search engine as a starting point!). The entire point of VAT that it's a tax on the consumer of the final product only, and that businesses get to deduct all the VAT levied on intermediate goods they've purchased to make and market the final product. That's literally the most basic, definitional aspect of VAT that sets it apart from traditional sales taxes. Since Google Ads are bought almost exclusively by businesses, EU member states (the EU doesn't actually levy VAT itself) receive a net tax benefit from VAT paid on Google Ads only on ads bought for personal enjoyment or by VAT exempt organizations, which must be a tiny proportion of their sales. Now there's an argument that Google's customers' customers would buy fewer taxed goods and services if they didn't see the ads, but that's a very different argument and certainly not something you could object to journalists not counting as "government income from Google's operations"