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US launches inquiry into French plan to tax tech giants
- fyoving 7y agoShouldn't be a long inquiry, this tax is textbook discriminatory trade barrier. If you look at EU policy as france and germany protecting their perceived interests by targeting US tech companies it starts making sense, I think a rule of thumb there is: "if it hurts google it should be law".
- lm28469 7y ago> by targeting US tech companies It's targeting tech giants, not US companies. "Any digital company with revenue of more than €750m - of which at least €25m is generated in France"
- fyoving 7y agoThat's adorable.
- CogitoCogito 7y agoWhile the law seems clearly to be targeted at US tech giants, why do you say it's discriminatory? > "Any digital company with revenue of more than €750m - of which at least €25m is generated in France" That sounds pretty non-discriminatory.
- nolok 7y ago11 of the 26 companies that fit the criterias are not american to begin with.
- jklepatch 7y agoJust showing your patriotism does not add much value to this thread. If you want to have a meaningful contribution, you should use facts and logical reasoning.
- hef19898 7y agoThe OP provided facts. Now is setting a certain threshold discriminatory, no idea. One interesting data point would be the percentage of US tech giants in total compared to those that fall under the proposed tax. If they are overrepresented it might be discriminatory, if not much less so.
- jklepatch 7y agoNot sure which fact you are referring to. “This is discriminatory ...” is a statememt, not a fact.
- lm28469 7y agoHow do you tax an industry if said industry is majoritarily composed of US companies without it being flagged as discriminatory ? If we look at it the other way it would mean US companies have a free pass.
- JAlexoid 7y agoSo... Spotify and Microsoft are one single industry? That's an interesting definition, buddy. And don;t forget that only the French sourced revenue is taxed.
- lm28469 7y agoMight not be the same industry per say but the sources of revenue overlap. Facebook and Amazon are obviously different services, they both make insane amount of money through ads, most of which escape taxes. The law is directed to companies fitting these criteria: - advertisement (Alibaba, Amazon, Apple, Ebay, Google, Groupon, Rakuten, Schibsted, Wish, Zalando.) - sale of personal data (Amadeus, Axel Springer, Booking, Expedia, Match.com, Randstad, Recruit, Sabre, Travelport Worldwide, Tripadvisor, Uber.) - intermediary platforms (Amazon, Criteo, Ebay, Facebook, Google, Microsoft, Twitter, Verizon) Don't forget that most of these companies abuse the system to avoid paying tax in most EU countries, for example airbnb paid something like 70k of tax in 2015 in France (a top google engineer would pay more tax than the whole airbnb business), because the only french based airbnb entity was a sub company which was used as an intermediary between France and Ireland. Of course it's in their interest/right to use as many loopholes as they legally can, but I don't see why France wouldn't update their tax laws to close of few of these loopholes and accommodate these new business model / business practices.
- nolok 7y ago> by targeting US tech companies It does not. In a preliminary evaluation, there are 26 companies that would match the criterias, 11 are not americans, 4 of them (that's 1/6th) are even french companies to begin with. • Vente de biens: Alibaba, Amazon, Apple, Ebay, Google, Groupon, Rakuten, Schibsted, Wish, Zalando. • Intermédiaire de services: Amadeus, Axel Springer, Booking, Expedia, Match.com, Randstad, Recruit, Sabre, Travelport Worldwide, Tripadvisor, Uber. • Publicité en ligne: Amazon, Criteo, Ebay, Facebook, Google, Microsoft, Twitter, Verizon. The point is to catch up with something everyone else has figured out: that the value is in the users data. Investors have caught up to it and acted on it, so did VC, so did companies, so did everyone ... Except governments. If the data is what you extract your value from, then it should be normal that it is what you are taxed on.
- fyoving 7y agoIf my math is correct then most of the companies are American, and by far most of the potential revenue. Considering the rhetoric leading to this tax and the french government's many raids and failed investigations into US companies and their taxes it's difficult even with careful wording for the french government to deny the actual target of this tax in a WTO type setting.
- etripe 7y agoMaybe the US should be targeting those companies, too. I don't think you can really say a multinational still is or acts "American", even if a majority of its employees and its owners are.
- JAlexoid 7y agoFor tax purposes most of those companies aren't even American. Apple, Alphabet's subsidiaries, Microsoft, Amazon, etc. are companies registered in Ireland or Luxembourg, or the likes.
- zaarn 7y agoIf Axel Springer is taxed on board. I'd sign the law with my own blood if it brings them into financial ruin. And Criteo too, they're the forgotten Data-kraken of Europe. Just go watch their Marketing Material!
- fulmicoton 7y agoCall it discriminatory if you want. They have been playing the system using different tax evasion schemes. France makes a law to force them to pay their fair due.
- dustinmoris 7y agoThe US can continue to bully everyone around them, but one day there will be no friends left and while the US is starting a trade war (or even an actual war) with friends and enemies other nations will strengthen their relations and the power balance will shift eventually. China has been on track to overtake the US as the largest economy for many years now. The US obviously feels threatened by the shift of economic powers and currently tries every thing they can to prevent this from happening, but it's going to happen regardless. China has a stable country, a hard working population, people feel content and the government is looking after its people despite what Western media is reporting. The Western world is increasingly becoming divided, fueled by capitalist greed, social media which is anything but "social", huge wealth disparities, racism and many other deep ingrained problems. The US might complain about other nations spying, etc., but it is the US and the NSA who has been the only nation which has been proven black on white that they have been grossly spying on everyone else in this world, it is the US which is the only nation which is constantly starting wars with other nations and destabilising economies. It's not China, nor France, nor the EU. I can only recommend anyone in the US to go and visit other nations and explore the world and it becomes very quickly apparent that the Western world has some deep issues which other countries seem to be much better in control of. If entire freedom of everything means that people live divided, in poverty, exploited, plagued by suicide, mental health issues, obesity and mass shootings, then maybe the way the West has shaped in the last 50 years is not all that great which everyone wants us to believe. Other countries have other issues, but honestly, after being to many many other places and far East I can only say that these problems look minor in comparison to what I observe in the West.
- nolok 7y agoI don't stricly disagree (nor agree) with your comment, but there are several thing that you include as "a global grave issue of the western world" in general but is actually very US-centric. When I look at the list you give, "people live divided, in poverty, exploited, plagued by suicide, mental health issues, obesity and mass shootings", it's not that those issues don't exists in other countries, but in the western world the US has that strange habit of always exhibiting the most extreme form, and frankly to not look like it's working and making any advance at fixing them.
- aluren 7y agoTo be frank, a 3% tax is too little too late.
- nolok 7y agoWe still hope to get it turned into a global EU thing rather than each of us bickering with its own ten of a percent competition over who gets screwed up more. But several EU countries are not on board, so we're taking baby steps, mostly aiming to prove that it does work and no those tech giants will not leave the french market (or if they do, yes someone else will rise in place).
- dustinmoris 7y agoAgreed, I applaud France to take a first step in the right direction.
- Maarten88 7y agoI wonder about the US response. Because they themselves also get shortchanged by the same companies, yet still doing their legwork, in this case by bullying France. Why doesn't the US tell Google to go complain to Bermuda, and implement a comparable tax themselves? And apply it to all corporation evading US corporate taxes while using US infrastructure? (big pharma) (The answer, of course is nationalism and corporate money in US politics)
- baud147258 7y agoIt's a start, once it exists the gov can change the rate. And it will perhaps lead to similar laws in Europe.
- Superleroy 7y agoWell, its a start. Maybe other countries will see that its not the end of the world to tax big companies and follow suit.
- astonex 7y agoIt's easier to get it accepted with a small rate. Later on it can be increased.
- Ragnarork 7y agoQuite funny of the US to complain about protectionism. I guess that's the paradox attached to it. When you do it it's fine, when someone else does it and you're affected, suddenly it's "discriminatory". Well yeah it's always been discriminatory in nature. They make a profit somewhere, they pay their taxes, period. Those loopholes need to be closed.
- fyoving 7y agoEven with recent tariffs, US tariffs are still generally low, it's hardly a poster child for "protectionism", the EU has other barriers in addition to tariffs and much of it is due to french protectionism. If you think that these "loopholes" should be closed then close them for all companies and countries, don't enact discriminatory laws and then act indignant about it.
- nolok 7y agoThe US strong protectionism is not through tariffs but through tax incentives, targeted investments hidden as national security contracts and things like "buy american" acts. Just because you dress it up doesn't change what it actually is.
- throwaway925 7y ago"The US strong protectionism is not through tariffs but through tax incentives, targeted investments hidden as national security contracts and things like "buy american" acts." what fraction of GDP is that? 1-5%? Europe semi public enterprises have a much bigger weight. Banking, energy, postal services, transport, telecommunications were until recent national monopolies and protecting domestic champions is still a matter of national interest.
- JAlexoid 7y agoDid you mention postal services? You mean like US, where only USPS has the right to put mail into your mailbox... and it's a federal criminal offense for anyone else to deliver mail into your mailbox?
- jklepatch 7y agoUS has a trade deficit with France. So potentially there is more to loose for France in case of a trade war: https://www.census.gov/foreign-trade/balance/c4279.html https://www.census.gov/foreign-trade/balance/c4279.html And generally speaking the US has a trade deficit with Europe: https://ustr.gov/countries-regions/europe-middle-east/europe/european-union https://ustr.gov/countries-regions/europe-middle-east/europe... My understanding of the economic system between the US and the world is that other countries support the US dollar by using it for trade, and that the US in turn is able to print a lot of US dollars that can be used by american consumers to buy goods from the world. Could other countries retaliate to US trade tariffs by dedollarizing trade?
- nolok 7y agoThe EU already does a fair amount of trade in euro. Also, it's important to understand that for France this is a very important issue of fairness. Not just for political gain, but at the street level. We are one of the best countries in the world in terms of change between income inequality pre and post tax redistribution (meaning while we're not terrible but not great either in terms of income inequality pre taxes, post taxes and redistribution we jump to one of the best overall). This law is not anti US (again like in my other comment: 11 of the 26 companies that fit the criterias are not from the US, several are EU based, and 4 are even french), it's merely making sure each pay (what wes believe to be) their fair share compared to the value they extract, and thus finally acting on the loophole that is "everyone knows and act like data is all the value / tax agencies should act like data has no value whatsoever so it can leave without being taxed". It's not even a move against the weird licencing trick "à la" Starbucks or anything like that, it's merely a tax on data extracted. Either it has value, and it should be taxed, or it doesn't (or not enough) and then it's fairly easy to stop extracting it.
- jklepatch 7y agoI wasnt trying to defend the US position. I actually think the position of France makes sense. I just wanted to present a strategic view of the situation. At this level, its not really a matter of who is right, and more of who has the power to do what.
- csomar 7y ago> Countries including France and the UK have accused firms of routing some profits through low-tax EU member states such as Ireland and Luxembourg. This seems to be the problem. The EU laws have allowed these companies to avoid taxes. Small countries just next to France (Luxembourg) are able to help these companies. But France will not go against these countries and instead try to handle things through taxes. I don't think this will workout greatly for France. France solution to everything seems to be: "Put a tax on it". The EU needs to get its crap together. I don't like Tariffs. But if you worked internationally you should know that the US is one of the most open countries when it comes to doing business. You can open a company, a bank account, get a tax ID, buy shares in US companies, trade, etc...
- luckylion 7y ago> But France will not go against these countries and instead try to handle things through taxes. France cannot change Luxembourg's business model (help tax evasion in neighboring countries, live off of EU subsidies), it has no jurisdiction there. They can change their tax code though.
- jklepatch 7y agoGet a bank account? If you are not a US resident, good luck with that. And i dont know what a company will be good for without a bank account. As for buying shares in the US, there is a 30pct tax for non-resident alien.
- speeq 7y agoThe UK accuses firms of routing profits through low-tax EU member states? Did they mention Jersey, Guernsey, Isle of Man + Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Turks and Caicos Islands? Well, I suppose they aren't EU member states, carry on.
- csomar 7y agoSame with France: Monaco. That's why I said they got to get their shit together.
- pjc50 7y agoNational sovereignty versus globalisation again. Is it reasonable for a company to make profits from customers in a country and then not pay that country's profit-based taxes? (Also, the US trying to bully France on this one is unlikely to go well, that tends to trigger a French nationalist response.)
- bantunes 7y agoIt's not reasonable. But it sure is profitable.
- raverbashing 7y agoIf I'm not mistaken the UK is planning to enact a similar tax as well
- Bayart 7y agoI guess we'll get the usual response of the US trying to bring France to its knees by putting tariffs on wine and cheese.
- yusi-san 7y agoThey have different pressure means on France now, like what they did about Alstom which is a strategic company for France (they produce essential elements about nuclear plants, nuclear submarines for example) now in the US hand through General Electric.
- Bayart 7y agoCorrect me if I'm wrong but GE bought the energy/grid part of the company, not the infrastructure/transportation part.
- ElKrist 7y agoThe turbines production is now under GE
- JAlexoid 7y agoFrance has a robust nationalization laws, btw. If US becomes belligerent enough, Alstom may be taken away from GE.
- olivepistacchio 7y agofunny how people feels supportive of some companies based on very loose national links. If you think companies have a national interest at heart (I will make an exception for Chinese), I have a bridge in Brooklyn to sell to you.