8 ms·

There is already a difference in tax (VAT) rates based on the consumer's location. This move would be distinct from import duties or product standards in that i

• r00fus 8y ago
  Wouldn’t it be more accurate to say that it’s correcting an imbalance? Google operates in France but is able to undercut France businesses for digital content sold to French people ( merchandise is traceable ) because it happens to have an Ireland operation?
  • jsty 8y ago
    IIRC, under EU VAT regs Google Ireland will charge and remit French VAT rates to the French treasury for digital content sold to consumers in France, so there's no imbalance there. The big issue is that digital services, particularly advertising, are so insanely profitable that most governments would also like to get their hands on a proportion of the profits accruing from sales of digital services in their country. They see the fact that Ireland / Luxembourg are able to book all the profit in one jurisdiction as unfair. There's probably not a huge likelihood of that happening any time soon at an EU level, so France has gone with the next best option from their POV. (Tax avoidance strategies that allow a large multinational to not pay much tax to their host country is a different kettle of fish, since most of the benefit of tackling those would probably accrue to the country of incorporation not France - e.g. the Apple settlement)
    • dfilppi 8y ago
      IOW, they see some loot to grab.
  • sbacic 8y ago
    If the imbalance is that an Irish company is more competitive than a French one, then no, not really.
    • BartBoch 8y ago
      In this case, this will be the race to the bottom and smallest countries will be able to charge 0% tax just for the sake of office space rented since their domestic market is small enough to not bring much of income tax (Luxembourg for example). The issue here is with omitting responsibilities. If a company makes hundreds of millions of income in a country, it should pay some taxes there. There is a huge push in Poland now, to introduce non-refundable revenue tax (of 1.5%) on larger companies in place of income tax. This would solve the issue entirely.
      • iguy 8y ago
        That's interesting. Are there large companies who would pay this 1.5%, who do not at present pay much Polish VAT? Or employ many people? Otherwise, why not tweak existing large taxes? You could do it on the employer's social security contribution (i.e. the part paid before not after the nominal salary) to make it sound better.
        • BartBoch 8y ago
          Companies like Google, Facebook etc. don't pay taxes in Poland by claiming expenses in Ireland/Holland. Thus they are "at loss" in Poland. The revenue tax would allow no tax avoidance due to that.
          • iguy 8y ago
            I understand but disagree about the tax on profits, see https://news.ycombinator.com/item?id=19295683 https://news.ycombinator.com/item?id=19295683 But my question about what Google et. al. actually do in Poland. Is it a sales office for a product made elsewhere? (Few employees, large cash flow.) An engineering office for a product sold elsewhere? (Little VAT, lots of income tax.) Etc.
  • tonyedgecombe 8y ago
    There are plenty of imbalances within the EU, Greece grows olives, Germany grows Volkswagens.
• sbacic 8y ago
  > On the other hand, the really quite high threshold might well be subject to complaints on the basis of distorting the single market. It probably should, but this is certainly not the first time a EU member country has tried (and gotten away with!) protectionism. Some other examples are stricter safety/quality standards that only (surprise!) local businesses' meet and government guarantee of private company debt (I have no idea how this is legal).