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G20 agrees to push ahead with digital tax
- dstick 7y agoI for one, am grateful. The world has changed massively the last 30 years and it’s time for international legislation to catch up :) Curious to see what the final implementation will look like.
- kantos2 7y agoMore expensive services, because the want more money. Nothing else.
- tedeh 7y agoI wonder how this is going to affect small businesses selling digital services to different countries within the EU while only having one office/country of incorporation. "The first pillar is dividing up the rights to tax a company where its goods or services are sold even if it does not have a physical presence in that country."
- krn 7y ago> to different countries within the EU while only having one office/country of incorporation I think this system already applies to paying VAT for digital purchases in the EU.
- T-A 7y agoI guess the same way as VAT: below a threshold (35k or 100k EUR of distance sales/year, set by the destination country), the seller's country VAT applies. https://ec.europa.eu/taxation_customs/individuals/buying-goods-services-online-personal-use/buying-goods/buying-goods-online-coming-from-within-eu-union_en https://ec.europa.eu/taxation_customs/individuals/buying-goo...
- toyg 7y agoThat’s an unehlpful principle, imho. It might be more practical to “tax up”, which is the traditional approach we have followed throughout the ages. We could build a g20 organism that accumulates revenue from all global companies and redistributes it on projects that make a difference on an equivalent scale, in things like energy, transportation, health, environment preservation, space exploration and so on. Obviously there would be issues of governance to sort out, as it’s always the case, but we’d be inching forward towards global cooperation on “humanity scale” - something that we will need, eventually, if we really want global peace under democratic rule.
- shaki-dora 7y agoEven the EU does not have the power to tax. It’s practically impossible that a rather informal forum like the G20 would be granted such authority.
- toyg 7y agoThe EU can’t tax directly... yet. It’s inching closer, though, with each subsequent “sovereign crisis” and the looming inevitability of easier mechanisms for fiscal transfers. I agree that it’s unlikely the g20 could or would do this tomorrow; I just think it’s what we should eventually aim for, and establishing principles against this so early-on is, imho, a mistake. But I guess I shouldn’t complain about what is, overall, positive news.
- ptah 7y agoI would assume there would be a threshold of some kind
- GolDDranks 7y ago"The U.S. government has voiced concern in the past that the European campaign for a “digital tax” unfairly targets U.S. tech giants." How about admitting that the U.S. tech giants unfairly use their monopolistic powers because the Internet has become a winner-takes-it-all economy.
- mfatica 7y agoCan you provide some examples there support this claim of a "winner-takes-it-all economy"?
- pennaMan 7y agoFacebook, Apple, Amazon, Netflix and Google should suffice.
- free652 7y agoAll of them complete between themselves, that's a bad example.
- TheOtherHobbes 7y agoI wasn't aware Facebook has its own hardware ecosystem or music delivery store, Google does grocery deliveries, and Apple runs its own open import and reseller market. The "competition" is pretty nominal at this point. The areas of competitive overlap are much smaller than the areas of monopolistic market dominance.
- Pungsnigel 7y agoThey compete between themselves and also has several external competitors?
- FDSGSG 7y agoFacebook has a plenty of competition in the social media space, Apple certainly isn't the only hardware manufacturer, Amazon has competition everywhere and so does Netflix. Google hardly runs the only ad network. None of these companies are taking it all.
- VLM 7y agoThe best traditional HN bad car analogy I can provide is Illinois State DOR is angry the new car factories are relocated in the rural south where the property taxes are low and what tax they do pay goes to the locals and not Illinois DOR, and they're selling those "foreign" cars in Illinois, so Illinois is going to add a special registration tax for cars registered but not manufactured in Illinois. This is kinda a bad example because Illinois still has a handful of plants left, although they're doing everything they can to push them out of the state as fast as possible, I selected them more as an example of a very high tax state than as a non-mfgr state.
- Shivetya 7y agoNah, I would use the ZEV system. Where if you don't produce it how we like it you pay a penalty; a tax. (Zero Emissions Vehicle) credits. The no physical existence loop hole is one worth closing, if you sell goods or services it should be taxed within the authority the sale occurs. That is common sense. However the second issue, what is digital and what isn't and how it can be taxed outside of the same point is a bit worrying, it basically sounds like, if we don't think you pay enough even following the rules you will pay this too. just watch for the exceptions to pile on because you can guarantee members of the G20 will put them in there, similar to how states and cities whack large chains by looking at their full sales corporate wide instead of local sales.
- twoodfin 7y agoIt would also never survive Constitutional scrutiny, as it’s a blatant violation of the Commerce Clause. States can’t impose import duties, however disguised.
- motohagiography 7y agoRelated to a comment I made on another thread about identity, FANG companies have two leverage points in this discussion. One is they can adjust their features to the countries in question, as few democratically elected governments could win an election if their population couldn't have iphones, amazon delivery, or netflix. The second is that without the US, sanctions against these companies are unenforceable, these companies own the digital identities of those populations, so those countries can only enforce data laws at the discretion of US authorities. They are increasingly an arm of US policy. The bargaining chips now are between the US wanting to regulate them domestically, and foreign countries wanting control and taxation. IMO, the deal proposed by US legislators will be, "deal with us, or them," where the US can offer protection and moderate taxation in exchange for more direct surveillance and policy levers. The real danger is new foreign tax obligations will likely be leveraged to break up the founder dictatorship equity model and create a scramble for their data assets.
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- ptah 7y agotongue firmly in cheek: people may actually be motivated to elect officials that cause them to scale back operations in their countries
- piokoch 7y ago"Britain and France have been among the most vocal proponents of proposals to tax big" This is kind of surprising in case of Britain. As long as I remember both Cayman islands and City of London, two of the best known tax havens, are British territories so Britain could prevent tax evasion easily. When it comes to "taxing" those pesky Facebooks and Netflix globally, I am not sure I understand justification for this. Companies pay taxes because they use resources and services provided in a given country (roads and other infrastructure, police protection, courts, etc.). Facebook does not use any resources in, say, Belgium, so why it should be taxed there? If a company located in US, like Facebook, avoids paying taxes there (strange that someone who pretends to be rather left leaning person like FB owner escapes taxes, but that's a different story) it is the US problem, not a global problem and they should sort this out somehow - for instance make FB to pay directly for services/resources provided by the state, maybe in the global economy corporate tax does not make much sense any more? I can imagine that Facebook has some fake office on Caymans, but I hardly believe they would relocate there data centers and employees to avoid taxes, so making tax proportional to number of employees in the given jurisdiction, size of the office, used electricity, etc. might make sense.
- nicoburns 7y ago> Companies pay taxes because they use resources and services provided in a given country (roads and other infrastructure, police protection, courts, etc.). That's one view. Another is that they pay taxes simply because they have resources that society needs. If Facebook is trading in the UK (benefitting from access to the UK market, then I think it is reasonable that they pay tax in the UK).
- wrong_variable 7y agoWhat about David Cameron, Beckham ... Every rich person in the UK is incorporated in British overseas territory. Shouldn't they be the first to be taxed ?
- notahacker 7y agoDavid and Victoria Beckham paid £12.7m tax in the last year. Facebook, which collected £1.3bn in UK sales, paid £15m...
- estebarb 7y agoI still don't get global taxes. In real life, how can digital startups keep track of global taxes? They simply ignore it, comply with them partially (hoping that Tuvalu doesn't sue them) or what? I understand that Google or Amazon can hire lawyers all around the world, but for a tiny self funded startup? it seems like a minefield.
- Daishiman 7y agoYou outsource the service to a payments provider that does that for you. The _same_ way global corporations have accounting offices in every country they operate in, or the same way you buy standardized industrial components that comply with existing regulations. It is not ideal, but getting paid overseas is far from the largest barrier startups have to face.
- Proven 7y agoThat is exactly what I needed - a digital tax to increase the cost and cut down choice of digital services. Take that, Google!