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Czech Republic proposes the highest digital tax rate in Europe

116 points by mlinksva 7y ago

cle 7y ago
> The potential disparity between the value of personal data and what users receive in return creates space for governments to seek reimbursement on society’s behalf. Is there a way to leverage competition to reduce this disparity instead of taxation? If there were proper competition, would there be a disparity?
- save_ferris 7y ago
  The problem here isn't a lack of competition. This happens because tech companies are well-equipped to siphon user data at massive scale and have been given the luxury of embedding these services into our daily lives without sufficiently educating the public around their business models. Ultimately, the public has very little control over what these companies do with this data, so there's a perverse mismatch of incentives here. Tech companies are incentivized to collect user data and not explain how it's used. Tech companies are incentivized to pay lobbyists to discourage the government from placing a market value on data. The public doesn't have that kind of lobbying influence.
  - cle 7y ago
    > Ultimately, the public has very little control over what these companies do with this data, so there's a perverse mismatch of incentives here. That's what I'm getting at. See for example: https://stratechery.com/2016/antitrust-and-aggregation/ https://stratechery.com/2016/antitrust-and-aggregation/
- chillacy 7y ago
  There might not ever be proper competition if internet companies are fundamentally winner-take-all monopolies where the more data you have the better you do.
- mtgx 7y ago
  What would competition do in terms of how advertising companies benefit from user data? I think the point is to start forcing companies into thinking sensitive user data is a liability that is taxed or worse if they do anything "nefarious" with that data (where nefarious could be whatever we think to put in that law). So it's like asking for Coca-cola to "have competition" (which generally just creates more sugar soda brands) vs taxing sugar.
  - laughinghan 7y ago
    This is brilliant, I've never thought of it this way. In a sense, GDPR already kind of does this, increasing the burden of storing user data. Would be interesting to consider dramatically ramp up this burden---maybe with a literal tax---for behavioral data stored longer than 90 days (or some other grace period), like a weaker version of Maciej Ceglowski's Six Fixes. https://idlewords.com/talks/what_happens_next_will_amaze_you.htm#six_fixes https://idlewords.com/talks/what_happens_next_will_amaze_you...
    - lugg 7y ago
      That's just going to optimise for short term thinking. Your customers will probably just get treated like crap long term.
      - laughinghan 7y ago
        What does keeping surveillance records of your customers' online activity indefinitely have to do with not treating customers like crap? Offline businesses now and always don't and have never had indefinite surveillance records of their customer's behavior. Is it your position that offline businesses are incapable of not treating their customers like crap? Besides which, aggregated data that can't be de-anonymized would be exempted, as described by Maciej Ceglowski. The 90-day limit is only on fine-grained, personally-identifiable behavioral data that isn't explicitly shared (the content of my HN comment should of course be kept forever/until I delete it; but there's no reason to keep the IP address I used, other than aggregate statistics about what cities people access HN from).
topicseed 7y ago
Targeted advertising is not the only or even main space in which global giants avoid taxes. So not sure why such a focus on FB and Google.
- rafiki6 7y ago
  Selection bias. HN community tends towards disliking Google/FB, and will tend to show articles that target those kinds of tech giants. In all honesty, they do have monopolies and it seems that the same type of anti-trust enforcement that was used to help Apple/Google in the browser war against Microsoft just isn't there anymore. Now Google/FB really do have a monopoly on user data. I think properly regulating instead of just taxing is more useful.
  - qmanjamz 7y ago
    If you have to name more than one company, the companies you've named do not have a monopoly. They can at worst be a duopoly. However, with the existence of Amazon, Microsoft, Twitter, Snapchat, and others, Google/FB are not even really a duopoly. But you're right that HN is immensely biased against Google and Facebook. That's why you frequently see commenters like yourself make the patently ridiculous claim that they are a monopoly.
  - llukas 7y ago
    > HN community tends towards disliking Google/FB HN community also understands better Google/FB business model and what actually happens with their data when fed into Google/FB.
Shivetya 7y ago
The way to tax the corporations is to have a minimum base rate they cannot escape and rules tightened on what qualifies to reduce their rate to that point. the value of personal data can only be quantified if you can follow the path to its eventual sale. If they are not selling it but using to expand their own presence I have no issue. However buyers should be easy to identify along with the transaction value. i just find it odd government and some who don't like what these companies put so much value into this data when the vast majority really assign it no value. people willfully give up so much and its not going to change because people want to be noticed more than they want to notice others
- akvadrako 7y ago
  Base rate of what? The problem is that their profit is artificially low.
  - AlexTWithBeard 7y ago
    Why humans have AMT, but corporations don't?
    - gok 7y ago
      What? Corporations absolutely have an AMT.
      - AlexTWithBeard 7y ago
        Hmm... Looks like you're right. How do they manage to pay zero taxes then? I thought AMT assumes that once you're beyond a certain level of income, your lose most deductions and essentially pay a certain percent of the income.
        knz42 7y ago
        The tax code taxes wins, not revenue. An org that invests all their margin into growth doesn't pay (as much) tax. The best way though is to create an offshore subsidiary, and then have the subsidiary invoice the main office for "services" or "IP licensing". The invoice becomes a cost and is deducted from revenue. "Everyone" (all the big players) do things like that. It's 100% legal.
tracer4201 7y ago
Why single out Google and FB or tech in general? Is the belief that these companies pay less taxes than non tech companies? I don’t have the breadth nor depth on this topic, just wanting to learn.
- toomuchtodo 7y ago
  Disproportionately deep pockets and impact. Research the breakup of Standard Oil (which became Exxon, Amoco, Mobil and Chevron) in the US. The power Standard Oil wielded was non-insignificant, as with behemoth tech companies. While these regulatory actions are surprising to some, if you’re into history it’s no surprise it’s happening again, but to tech instead of oil.
  - tracer4201 7y ago
    Standard oil had major political influence and the energy companies today still have major political clout. Source: worked for 6 years for a vertically integrated energy company. It’s not clear how big tech companies have the same political influence. Yes, social media has been manipulated I think to influence outcomes, but do social media companies themselves have that influence over politicians? To be clear, I am not saying you’re wrong. I’m asking a question.
- tootahe45 7y ago
  Because politicians attack things perceived as bad by the public. If there's a time to implement such a tax it's after a year of sensationalist (and largely fake) news about FB and Google, from exaggerated data breaches to helping terrorists.
  - megous 7y ago
    No. I have a database of all news article titles from major Czech Media over the last decade, and there's precisely 2 news about google and data leaks and 2 news about google helping terrorists.
  - Fnoord 7y ago
qmanjamz 7y ago
The fact that Bloomberg employs people who think minimum wages are a good idea is all I need to know that they are not a credible source for economic policy recommendations.
ed_balls 7y ago
I have a feeling that this won't work. The only robust way to implement fair tax is to tax corporation 1%, but everyone in EEA has to do it. I know that taxing revenue is not optimal, but how much money corporations spend on gov audits, accounting what is profit and what is cost etc.
- ed_balls 7y ago
  I'd appreciate a reason why I was downvoted.
protomyth 7y ago
Intermediary platforms such as Airbnb and Uber exacerbate cities’ housing problems and weaken worker protections. Its interesting that this line has no support and just treated as fact for this article. Is there a source to explain the reasoning?
- sokoloff 7y ago
  Full time AirBnB rentals almost certainly exacerbate any housing shortages that might exist. A tourist in general is willing to pay far more (maybe 5-10x) per night of temporary lodging than a resident is willing/able to pay for 365 days per year. This is especially true in beautiful but inexpensive, tourist magnet cities like Prague, Vienna, Budapest, and the like. Taking otherwise available rentals off the full-time rental market and moving the "up" the economic return ladder to AirBnB rentals makes the housing situation tighter for residents and would-be residents. (I'm a happy user of AirBnB platform and am "OK" with the conversion of real estate to its highest and best use, but I understand the opposition argument and think it has some merit.)
  - ShorsHammer 7y ago
    Airbnb is highlighting a zoning problem that governments are unwilling to admit to themselves. Sublets and short term rentals existed long before before and most cities on Earth didn't care, but once a frictionless platform came along it suddenly was a problem. My landlord kicked us out to run an airbnb fulltime after seeing how much a neighbour was earning. (Around New Years /Christmas you could easily bring in 2 months rent). Despite all this I hold no illwill towards Airbnb. If any other basic need was chronically undersupplied due to government inaction people tend to riot, yet somehow housing gets a free pass.
    - pjc50 7y ago
      People say "zoning problem", but should we really solve the problem that 1 in 6 residences in Edinburgh is an airbnb by building skyscrapers in a World Heritage Site? I suppose it would repel the tourists.
muckrakerz 7y ago
Once again the former eastern block is implementing smart reforms that are pro-market and anti-globalist.
- bduerst 7y ago
  How is increased taxation pro-market?
  - rvp-x 7y ago
    At least for my own country, if you buy advertising from Google, you pay 0% VAT because it's not a local purchase. With a local company there's 18% VAT. The local companies are starting the competition at a huge disadvantage. An even playing field is a healthier market, without megacorps that can run at a loss for decades to crush out any chance competition in a field.
    - bduerst 7y ago
      In accordance to Article 44 of EU Council Directive 2006/112/EC, you're supposed to be reporting your spend with Google and paying VAT taxes on it. You don't have to pay it right away at the time of purchase, but you do have to pay it. You might want to talk to your company's accountant...
      - miskin 7y ago
        If you do business with VAT registered company from different country, you do not pay VAT upfront with purchase, but you report it at the end of quarter (monthly if you are big enough). You will actually never pay this VAT if you are VAT registered company as you will report it and ask for refund at the same time. On the the other hand, if you are doing business with local company you pay VAT with payment for service or goods and ask for refund at the end of quarter. Long term cost is same, but it blocks your resources (paid VAT) and it may be difference for some companies.
- microcolonel 7y ago
deleted 7y ago
[deleted]
_mikz 7y ago
It is important to know, that our ruling party is a populist left wing all the time promising one. So whatever might be proposed might not have enough push to be implemented.
mc32 7y ago
Could SF and other cities like Vanc, BC, Miami, London, etc., levy a significant tax and use that tax to build affordable or subsidized housing to counteract pricing out of the affected people.
- gok 7y ago
  The reason construction of affordable housing isn't happening has nothing to do with those city's lack of revenue.
  - mc32 7y ago
    Wouldn’t this be a fairer tax rather than diverting general funds?
    - gok 7y ago
      The pricing out of existing residents isn't caused (much) by local taxes either.
      - mc32 7y ago
        So if AB&B are reducing the supply of housing to locals who don’t own, then this tax could be used to build or subsidize housing costs for those who because of the reduced inventory and commensurate price increase can’t afford the housing they were once able to.
        microcolonel 7y ago
        AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly normally (AirBnB or no). The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as they should perhaps be allowed to be, so they do not put any pressure on politicians to stop this gambit.
scrape_it 7y ago
This reminds me of the Estonian business startup thing that BBC covered, has anyone actually used this to a success? What would be the point of starting a business in countries like Czech and Estonia vs the US?
- atlasunshrugged 7y ago
  Do you mean e-residency (https://e-resident.gov.ee/ https://e-resident.gov.ee/)? I work there, happy to answer questions if you have them. The value of starting a business in Estonia vs. elsewhere depends on a number of factors - we mainly focus on folks from outside the EU (or citizens of the EU but living outside it) who want an EU based company they can run remotely in English which is tough in some jurisdictions
  - scrape_it 7y ago
    Ah yes! Pleasantly surprised you'd follow up on here. Does Estonia offer any anonymity through its e-residency program? A lot of us have stereotypes towards EU regulations as being restrictive, wonder if you could address this one glaring fear in the back of our minds (ex. GPDR). What should folks on HN know a thing or two about Estonia? I've literally only heard of the country 4 years ago when I played Arma: Cold War with an Estonian gamer, which ironically is a military simulation of gorilla warfare against a USSR invasion of the Baltics..... (see OF: Resistance)
    - atlasunshrugged 7y ago
      Haha I'm a big HN reader so I was happy to jump in :) Sorry for the delay, I'm actually on vacation back home (I'm an American from SF) It depends what you mean by anonymity - if you're just an e-Resident (eg. you've applied for the status and gotten the card) then it's not public to anyone except you and the Estonian government. If you open a business however, then there is a large amount of transparency. Estonia is very very transparent, I can even see things like the age of the owner of a company if I'm so inclined to look it up. To be honest, I haven't seen much in terms of restrictive policy in Estonia specifically with the exception of banking - Estonia is a small country of just 1.3m and most of the banks are foreign owned. That means there's not much sway we have domestically over policy and it's dictated from outside (mainly from the parent banks in the Nordics) and it can be tough to open a bank account as a foreigner if you don't have strong ties to Estonia. That said, this is getting tighter just about everywhere as banks try to comply with Know Your Customer regulations (however, my impression is that this is mainly brought on by the US rather than the EU and banks are so stringent because they don't want to lose their US dollar payment capabilities from correspondent banks) There are a lot of interesting things about Estonia - I'll skip the Googleable things and say that from living there the most interesting thing is on one side how closed and yet how open the people are. To give an example, in my apartment complex I don't believe I ever spoke one word to any of my neighbors in a year, but for the people I met via some group activity or was introed by Estonians I knew from work, they are incredibly open and friendly (basically if you don't have a reason to speak with an Estonian they think you're incredibly strange if you try to initiate a conversation, but if there's a reason, they're very friendly people). The other really interesting thing I've found is the Russian/Estonian dynamic. There's still a large Russian minority of people in Estonia from the Soviet days and some communities are not integrated at all, there are constant political debates about forcing schools to only teach in Estonian (there are currently ones that have all Russian courses). So you have a situation where there are people born and raised in Estonia but who don't speak the language and live pretty much only in Russian communities and have a different worldview of many Estonians.
hevi_jos 7y ago
"It has helped malicious actors during the 2016 U.S. presidential election and the Brexit referendum, arguably helping to subvert democratic institutions." Wow, it seems clear to me that some people only respect democracy when they win. I don't like Brexit but if people in UK vote for it, let them be. The malicious actors and those that try to subvert democracy are the billionaires that buy Media in order to propagate lies that at the current time remain unproven. A tax on absolute income is a very dangerous thing in any gobertment. But we already have it, with inflation.
bartimus 7y ago
We can do this in Europe because we are great at killing innovation through our taxes and regulations. This way we can safely tax innovative tech giants without hurting our own tech giants. Because they don't exist here. We don't like that thing that you do. So we'll just apply taxes and let you continue doing the thing we don't like you to do.
- point78 7y ago
  As opposed to the billions tech giants dodge taxes
  - evanriley 7y ago
    Surely there is a balance between overly taxing and letting them get away without paying them?
    - sasasassy 7y ago
      I'm guessing a 2-7% tax is on the low side of such balance.
      - JumpCrisscross 7y ago
        > 2-7% tax is on the low side of such balance A 7% tax on revenues is a 50% tax on a business with a 14% margin. It's even more damaging when one considers start-ups, who run negative profits in their early years. (Seven percent is thus eleven months of runway in the Czech Republic for every 12 months a German competitor gets.) Seven percent is generally prohibitive to low-gross margin business, e.g. any tech company producing physical devices or doing anything next to retail. It thus compresses an economy's accessible tech sector to enterprise businesses. If these taxes remain confined to ad-driven businesses, that's a fair tradeoff. But given Europe's penchant for over-encroachment, it could very easily be over-applied. TL; DR Top-line taxes transfer wealth to high-margin businesses over low-margin businesses and from start-ups to incumbents.
      - microcolonel 7y ago
halukakin 7y ago
I think they should raise it to 30%. Any given country provides a much better platform to these companies compared to what google play provides to app publishers.
mlinksva 7y ago
Relatedly https://www.nytimes.com/2019/05/06/opinion/tax-facebook-google.html https://www.nytimes.com/2019/05/06/opinion/tax-facebook-goog... https://paulromer.net/faqs-on-targeted-ads/ https://paulromer.net/faqs-on-targeted-ads/

116 points by mlinksva 7y ago

cle 7y ago

> The potential disparity between the value of personal data and what users receive in return creates space for governments to seek reimbursement on society’s behalf. Is there a way to leverage competition to reduce this disparity instead of taxation? If there were proper competition, would there be a disparity?

save_ferris 7y ago
The problem here isn't a lack of competition. This happens because tech companies are well-equipped to siphon user data at massive scale and have been given the luxury of embedding these services into our daily lives without sufficiently educating the public around their business models. Ultimately, the public has very little control over what these companies do with this data, so there's a perverse mismatch of incentives here. Tech companies are incentivized to collect user data and not explain how it's used. Tech companies are incentivized to pay lobbyists to discourage the government from placing a market value on data. The public doesn't have that kind of lobbying influence.
- cle 7y ago
  > Ultimately, the public has very little control over what these companies do with this data, so there's a perverse mismatch of incentives here. That's what I'm getting at. See for example: https://stratechery.com/2016/antitrust-and-aggregation/ https://stratechery.com/2016/antitrust-and-aggregation/
chillacy 7y ago
There might not ever be proper competition if internet companies are fundamentally winner-take-all monopolies where the more data you have the better you do.
mtgx 7y ago
What would competition do in terms of how advertising companies benefit from user data? I think the point is to start forcing companies into thinking sensitive user data is a liability that is taxed or worse if they do anything "nefarious" with that data (where nefarious could be whatever we think to put in that law). So it's like asking for Coca-cola to "have competition" (which generally just creates more sugar soda brands) vs taxing sugar.
- laughinghan 7y ago
  This is brilliant, I've never thought of it this way. In a sense, GDPR already kind of does this, increasing the burden of storing user data. Would be interesting to consider dramatically ramp up this burden---maybe with a literal tax---for behavioral data stored longer than 90 days (or some other grace period), like a weaker version of Maciej Ceglowski's Six Fixes. https://idlewords.com/talks/what_happens_next_will_amaze_you.htm#six_fixes https://idlewords.com/talks/what_happens_next_will_amaze_you...
  - lugg 7y ago
    That's just going to optimise for short term thinking. Your customers will probably just get treated like crap long term.
    - laughinghan 7y ago
      What does keeping surveillance records of your customers' online activity indefinitely have to do with not treating customers like crap? Offline businesses now and always don't and have never had indefinite surveillance records of their customer's behavior. Is it your position that offline businesses are incapable of not treating their customers like crap? Besides which, aggregated data that can't be de-anonymized would be exempted, as described by Maciej Ceglowski. The 90-day limit is only on fine-grained, personally-identifiable behavioral data that isn't explicitly shared (the content of my HN comment should of course be kept forever/until I delete it; but there's no reason to keep the IP address I used, other than aggregate statistics about what cities people access HN from).

topicseed 7y ago

Targeted advertising is not the only or even main space in which global giants avoid taxes. So not sure why such a focus on FB and Google.

rafiki6 7y ago
Selection bias. HN community tends towards disliking Google/FB, and will tend to show articles that target those kinds of tech giants. In all honesty, they do have monopolies and it seems that the same type of anti-trust enforcement that was used to help Apple/Google in the browser war against Microsoft just isn't there anymore. Now Google/FB really do have a monopoly on user data. I think properly regulating instead of just taxing is more useful.
- qmanjamz 7y ago
  If you have to name more than one company, the companies you've named do not have a monopoly. They can at worst be a duopoly. However, with the existence of Amazon, Microsoft, Twitter, Snapchat, and others, Google/FB are not even really a duopoly. But you're right that HN is immensely biased against Google and Facebook. That's why you frequently see commenters like yourself make the patently ridiculous claim that they are a monopoly.
- llukas 7y ago
  > HN community tends towards disliking Google/FB HN community also understands better Google/FB business model and what actually happens with their data when fed into Google/FB.

Shivetya 7y ago

The way to tax the corporations is to have a minimum base rate they cannot escape and rules tightened on what qualifies to reduce their rate to that point. the value of personal data can only be quantified if you can follow the path to its eventual sale. If they are not selling it but using to expand their own presence I have no issue. However buyers should be easy to identify along with the transaction value. i just find it odd government and some who don't like what these companies put so much value into this data when the vast majority really assign it no value. people willfully give up so much and its not going to change because people want to be noticed more than they want to notice others

akvadrako 7y ago
Base rate of what? The problem is that their profit is artificially low.
- AlexTWithBeard 7y ago
  Why humans have AMT, but corporations don't?
  - gok 7y ago
    What? Corporations absolutely have an AMT.
    - AlexTWithBeard 7y ago
      Hmm... Looks like you're right. How do they manage to pay zero taxes then? I thought AMT assumes that once you're beyond a certain level of income, your lose most deductions and essentially pay a certain percent of the income.
      - knz42 7y ago
        The tax code taxes wins, not revenue. An org that invests all their margin into growth doesn't pay (as much) tax. The best way though is to create an offshore subsidiary, and then have the subsidiary invoice the main office for "services" or "IP licensing". The invoice becomes a cost and is deducted from revenue. "Everyone" (all the big players) do things like that. It's 100% legal.

tracer4201 7y ago

Why single out Google and FB or tech in general? Is the belief that these companies pay less taxes than non tech companies? I don’t have the breadth nor depth on this topic, just wanting to learn.

toomuchtodo 7y ago
Disproportionately deep pockets and impact. Research the breakup of Standard Oil (which became Exxon, Amoco, Mobil and Chevron) in the US. The power Standard Oil wielded was non-insignificant, as with behemoth tech companies. While these regulatory actions are surprising to some, if you’re into history it’s no surprise it’s happening again, but to tech instead of oil.
- tracer4201 7y ago
  Standard oil had major political influence and the energy companies today still have major political clout. Source: worked for 6 years for a vertically integrated energy company. It’s not clear how big tech companies have the same political influence. Yes, social media has been manipulated I think to influence outcomes, but do social media companies themselves have that influence over politicians? To be clear, I am not saying you’re wrong. I’m asking a question.
tootahe45 7y ago
Because politicians attack things perceived as bad by the public. If there's a time to implement such a tax it's after a year of sensationalist (and largely fake) news about FB and Google, from exaggerated data breaches to helping terrorists.
- megous 7y ago
  No. I have a database of all news article titles from major Czech Media over the last decade, and there's precisely 2 news about google and data leaks and 2 news about google helping terrorists.
- Fnoord 7y ago

qmanjamz 7y ago

The fact that Bloomberg employs people who think minimum wages are a good idea is all I need to know that they are not a credible source for economic policy recommendations.

ed_balls 7y ago

I have a feeling that this won't work. The only robust way to implement fair tax is to tax corporation 1%, but everyone in EEA has to do it. I know that taxing revenue is not optimal, but how much money corporations spend on gov audits, accounting what is profit and what is cost etc.

ed_balls 7y ago
I'd appreciate a reason why I was downvoted.

protomyth 7y ago

Intermediary platforms such as Airbnb and Uber exacerbate cities’ housing problems and weaken worker protections. Its interesting that this line has no support and just treated as fact for this article. Is there a source to explain the reasoning?

sokoloff 7y ago
Full time AirBnB rentals almost certainly exacerbate any housing shortages that might exist. A tourist in general is willing to pay far more (maybe 5-10x) per night of temporary lodging than a resident is willing/able to pay for 365 days per year. This is especially true in beautiful but inexpensive, tourist magnet cities like Prague, Vienna, Budapest, and the like. Taking otherwise available rentals off the full-time rental market and moving the "up" the economic return ladder to AirBnB rentals makes the housing situation tighter for residents and would-be residents. (I'm a happy user of AirBnB platform and am "OK" with the conversion of real estate to its highest and best use, but I understand the opposition argument and think it has some merit.)
- ShorsHammer 7y ago
  Airbnb is highlighting a zoning problem that governments are unwilling to admit to themselves. Sublets and short term rentals existed long before before and most cities on Earth didn't care, but once a frictionless platform came along it suddenly was a problem. My landlord kicked us out to run an airbnb fulltime after seeing how much a neighbour was earning. (Around New Years /Christmas you could easily bring in 2 months rent). Despite all this I hold no illwill towards Airbnb. If any other basic need was chronically undersupplied due to government inaction people tend to riot, yet somehow housing gets a free pass.
  - pjc50 7y ago
    People say "zoning problem", but should we really solve the problem that 1 in 6 residences in Edinburgh is an airbnb by building skyscrapers in a World Heritage Site? I suppose it would repel the tourists.

muckrakerz 7y ago

Once again the former eastern block is implementing smart reforms that are pro-market and anti-globalist.

bduerst 7y ago
How is increased taxation pro-market?
- rvp-x 7y ago
  At least for my own country, if you buy advertising from Google, you pay 0% VAT because it's not a local purchase. With a local company there's 18% VAT. The local companies are starting the competition at a huge disadvantage. An even playing field is a healthier market, without megacorps that can run at a loss for decades to crush out any chance competition in a field.
  - bduerst 7y ago
    In accordance to Article 44 of EU Council Directive 2006/112/EC, you're supposed to be reporting your spend with Google and paying VAT taxes on it. You don't have to pay it right away at the time of purchase, but you do have to pay it. You might want to talk to your company's accountant...
    - miskin 7y ago
      If you do business with VAT registered company from different country, you do not pay VAT upfront with purchase, but you report it at the end of quarter (monthly if you are big enough). You will actually never pay this VAT if you are VAT registered company as you will report it and ask for refund at the same time. On the the other hand, if you are doing business with local company you pay VAT with payment for service or goods and ask for refund at the end of quarter. Long term cost is same, but it blocks your resources (paid VAT) and it may be difference for some companies.
microcolonel 7y ago

deleted 7y ago

[deleted]

_mikz 7y ago

It is important to know, that our ruling party is a populist left wing all the time promising one. So whatever might be proposed might not have enough push to be implemented.

mc32 7y ago

Could SF and other cities like Vanc, BC, Miami, London, etc., levy a significant tax and use that tax to build affordable or subsidized housing to counteract pricing out of the affected people.

gok 7y ago
The reason construction of affordable housing isn't happening has nothing to do with those city's lack of revenue.
- mc32 7y ago
  Wouldn’t this be a fairer tax rather than diverting general funds?
  - gok 7y ago
    The pricing out of existing residents isn't caused (much) by local taxes either.
    - mc32 7y ago
      So if AB&B are reducing the supply of housing to locals who don’t own, then this tax could be used to build or subsidize housing costs for those who because of the reduced inventory and commensurate price increase can’t afford the housing they were once able to.
      - microcolonel 7y ago
        AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly normally (AirBnB or no). The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as they should perhaps be allowed to be, so they do not put any pressure on politicians to stop this gambit.

scrape_it 7y ago

This reminds me of the Estonian business startup thing that BBC covered, has anyone actually used this to a success? What would be the point of starting a business in countries like Czech and Estonia vs the US?

atlasunshrugged 7y ago
Do you mean e-residency (https://e-resident.gov.ee/ https://e-resident.gov.ee/)? I work there, happy to answer questions if you have them. The value of starting a business in Estonia vs. elsewhere depends on a number of factors - we mainly focus on folks from outside the EU (or citizens of the EU but living outside it) who want an EU based company they can run remotely in English which is tough in some jurisdictions
- scrape_it 7y ago
  Ah yes! Pleasantly surprised you'd follow up on here. Does Estonia offer any anonymity through its e-residency program? A lot of us have stereotypes towards EU regulations as being restrictive, wonder if you could address this one glaring fear in the back of our minds (ex. GPDR). What should folks on HN know a thing or two about Estonia? I've literally only heard of the country 4 years ago when I played Arma: Cold War with an Estonian gamer, which ironically is a military simulation of gorilla warfare against a USSR invasion of the Baltics..... (see OF: Resistance)
  - atlasunshrugged 7y ago
    Haha I'm a big HN reader so I was happy to jump in :) Sorry for the delay, I'm actually on vacation back home (I'm an American from SF) It depends what you mean by anonymity - if you're just an e-Resident (eg. you've applied for the status and gotten the card) then it's not public to anyone except you and the Estonian government. If you open a business however, then there is a large amount of transparency. Estonia is very very transparent, I can even see things like the age of the owner of a company if I'm so inclined to look it up. To be honest, I haven't seen much in terms of restrictive policy in Estonia specifically with the exception of banking - Estonia is a small country of just 1.3m and most of the banks are foreign owned. That means there's not much sway we have domestically over policy and it's dictated from outside (mainly from the parent banks in the Nordics) and it can be tough to open a bank account as a foreigner if you don't have strong ties to Estonia. That said, this is getting tighter just about everywhere as banks try to comply with Know Your Customer regulations (however, my impression is that this is mainly brought on by the US rather than the EU and banks are so stringent because they don't want to lose their US dollar payment capabilities from correspondent banks) There are a lot of interesting things about Estonia - I'll skip the Googleable things and say that from living there the most interesting thing is on one side how closed and yet how open the people are. To give an example, in my apartment complex I don't believe I ever spoke one word to any of my neighbors in a year, but for the people I met via some group activity or was introed by Estonians I knew from work, they are incredibly open and friendly (basically if you don't have a reason to speak with an Estonian they think you're incredibly strange if you try to initiate a conversation, but if there's a reason, they're very friendly people). The other really interesting thing I've found is the Russian/Estonian dynamic. There's still a large Russian minority of people in Estonia from the Soviet days and some communities are not integrated at all, there are constant political debates about forcing schools to only teach in Estonian (there are currently ones that have all Russian courses). So you have a situation where there are people born and raised in Estonia but who don't speak the language and live pretty much only in Russian communities and have a different worldview of many Estonians.

hevi_jos 7y ago

"It has helped malicious actors during the 2016 U.S. presidential election and the Brexit referendum, arguably helping to subvert democratic institutions." Wow, it seems clear to me that some people only respect democracy when they win. I don't like Brexit but if people in UK vote for it, let them be. The malicious actors and those that try to subvert democracy are the billionaires that buy Media in order to propagate lies that at the current time remain unproven. A tax on absolute income is a very dangerous thing in any gobertment. But we already have it, with inflation.

bartimus 7y ago

We can do this in Europe because we are great at killing innovation through our taxes and regulations. This way we can safely tax innovative tech giants without hurting our own tech giants. Because they don't exist here. We don't like that thing that you do. So we'll just apply taxes and let you continue doing the thing we don't like you to do.

point78 7y ago
As opposed to the billions tech giants dodge taxes
- evanriley 7y ago
  Surely there is a balance between overly taxing and letting them get away without paying them?
  - sasasassy 7y ago
    I'm guessing a 2-7% tax is on the low side of such balance.
    - JumpCrisscross 7y ago
      > 2-7% tax is on the low side of such balance A 7% tax on revenues is a 50% tax on a business with a 14% margin. It's even more damaging when one considers start-ups, who run negative profits in their early years. (Seven percent is thus eleven months of runway in the Czech Republic for every 12 months a German competitor gets.) Seven percent is generally prohibitive to low-gross margin business, e.g. any tech company producing physical devices or doing anything next to retail. It thus compresses an economy's accessible tech sector to enterprise businesses. If these taxes remain confined to ad-driven businesses, that's a fair tradeoff. But given Europe's penchant for over-encroachment, it could very easily be over-applied. TL; DR Top-line taxes transfer wealth to high-margin businesses over low-margin businesses and from start-ups to incumbents.
    - microcolonel 7y ago

halukakin 7y ago

I think they should raise it to 30%. Any given country provides a much better platform to these companies compared to what google play provides to app publishers.

mlinksva 7y ago

Relatedly https://www.nytimes.com/2019/05/06/opinion/tax-facebook-google.html https://www.nytimes.com/2019/05/06/opinion/tax-facebook-goog... https://paulromer.net/faqs-on-targeted-ads/ https://paulromer.net/faqs-on-targeted-ads/