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Taxing digital companies based on digital presence certainly makes sense to me, as a layperson. A company that's selling ads to a French company that wants to s
by 99052882514569 7y ago
Taxing digital companies based on digital presence certainly makes sense to me, as a layperson. A company that's selling ads to a French company that wants to show those ads to French users is doing business in France, end of story.
Taxing only very large corporations - that's a little more questionable, but plenty of countries (including the US) treat small businesses preferentially, so it's not like it's unprecedented.
- mywittyname 7y agoTaxation/regulations can place an undue burden on smaller companies. So I think it's perfectly acceptable to use size as a component of taxation. It's like progressive taxation applied to business.
- aey 7y agoNo matter how the law is written, if the result is that the exceptions only apply to French companies and not to the US, it’s bullshit :). They could pick arbitrary ways to bisect the set until they get the desired result.
- dfxm12 7y agoThat's not the case. Per the article: About 30 companies will pay it - mostly US groups such as Alphabet, Apple, Facebook, Amazon and Microsoft. Chinese, German, Spanish and British firms are also affected, as well as the French online advertising firm Criteo.
- deleted 7y ago[deleted]
- jorge-d 7y agoWho said it was only targeting US companies? 26 companies fall under the required threshold. Not all of them are US based and there's even a French one (criteo). Here is the full list [1]: • Sales of goods: Alibaba, Amazon, Apple, Ebay, Google, Groupon, Rakuten, Schibsted, Wish, Zalando. • Services: Amadeus, Axel Springer, Booking, Expedia, Match.com, Randstad, Recruit, Sabre, Travelport Worldwide, Tripadvisor, Uber. • Advertisement: Amazon, Criteo, Ebay, Facebook, Google, Microsoft, Twitter, Verizon. [1] http://www.lefigaro.fr/conjoncture/2019/03/20/20002-20190320ARTFIG00213-la-taxe-gafa-concerne-26-entreprises-en-france.php http://www.lefigaro.fr/conjoncture/2019/03/20/20002-20190320...
- mises 7y agoMost of those are still American businesses (twenty of twenty-nine, or over two-thirds). Another interesting way to look at it would be by revenue breakdown - I suspect the total revenue of American companies may be disproportionately high.
- romwell 7y agoYeah right, who'd even notice Alibaba? FYI, Alibaba's revenue (~56B) exceeds that of Ebay (~10B), Uber (~11B), Expedia (~11b), Twitter (~3b), Groupon (~3v) and Tripadvisor (~2b) combined. Yes, Amazon/Apple/Microsoft/Google/Verizon are still huge. But it doesn't mean there aren't other big fish out there.
- eeeeeeeeeeeee 7y agoWell, let’s compare tax rates the foreign companies pay with the local French companies. Something tells me that the American companies are making out like bandits compared to the French ones that have to pay all local taxes. I see this as as an attempt to equalize the competitive playing field. This is just another example of Americans (and hey, I’m American) feeling they are permitted to do whatever they want, even outside of their own borders. It’s peak arrogance.
- Allower 7y agoWait Sabre is a real company?
- liberte82 7y agoWhy? Is only the US allowed to practice protectionism?
- ziddoap 7y agoVery salient point. It's funny that the US is allowed to tariff anyone who breathes at them wrong under the guise of protecting US jobs/etc. but they are up in arms when another country decides to implement anything remotely seen as "against the US".
- weber111 7y agoPlease don't confuse the US with our government! (or, rather, with the subset of people in our government who happen to be talking at a given time---there are many levelheaded, effective people working in our government who never enter the spotlight)
- ziddoap 7y agoI try to avoid painting with a broad brush wherever possible, but I was also trying to be sufficiently succinct. There is, of course, good to be found within the US government. Although, to an outsider, it feels like one has to look much harder to find that good now adays.
- jtx22 7y agoNo, China is the protectionism King.
- magduf 7y agoExactly. A company with only 1 person has to spend a large share of its time-resources just complying with taxes and regulations. The more people in the company, the lower the proportion of those time-resources are needed. With a large company, it's easy to employ someone (or a team even) to do that work full-time, but for a tiny company it's impossible; they wouldn't get any actual work done to keep the company running. This would have the effect of killing small business, which would provide a huge inertia advantage to large businesses (which started small, when they didn't have so many regulations).
- alt_f4 7y ago> company that's selling ads to a French company that wants to show those ads to French users is doing business in France, end of story. yeah, so taxes make sense to pay for the roads, bridges and healthcare that these ads are using.
- xkcd-sucks 7y agoGiven the effect of social networking products on mental health, in this light it absolutely makes sense for countries with nationalized healthcare to tax big tech
- alt_f4 7y agowell, it only "makes sense" in case you are literally insane
- sctb 7y agoCould you please review the guidelines? You've been breaking them quite a bit and eventually we ban accounts that won't stop. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- 99052882514569 7y agoTaxes make sense to pay for the court system that's enforcing contracts, just to name the first thing that comes to mind.
- ziddoap 7y agoWhere the taxes are coming from and what they are used for do not need to be in the same industry or sector. Maybe it's different where you live? E.G. An oil company being taxed for the revenue it made during an oil project does not get ear-marked for oil-only usage by the government.
- Voloskaya 7y agoTaxes in France (and in many other more [than the US] socialist countries) are not just about paying for the public infrastructure that you use. It's about contributing to the development of the society by taxing very lucrative businesses and individuals (and also taxing not so lucrative businesses sadly). If you are an individual in France, and you are well off, you will pay much more taxes than what the state pays in infrastructure for you, why do you think it should be different just for internet businesses? You may not agree with that philosophy, in which case you can decide to stop doing business in France. Considering the amount of cash GAFAs make, I would wager they will continue doing business in France and pay that 3% tax rather than miss 65M wealthy customers.
- bluecalm 7y agoIt's really not that simple. They don't use any of the country infrastructure or workers. If I make a video game and sell it to a person in France does it mean I do business in France? It seems to me it should be treated the same as French person coming to my country, buying my game and going back home. We've just skipped on unnecessary traveling. Those things are subject to debate and power struggle but it's clear that: I sell it to you so I do business where you live isn't story-ending argument. In fact I think it's both not very consistent with general tax law principles nor practical as the burden of complying with regulations in every country you sell to even if you don't have presence there means many companies dummy won't sell at all to smaller countries.
- Renaud 7y ago>France does it mean I do business in France? It seems to me it should be treated the same as French person coming to my country, buying my game and going back home. In that case you, the vendor, would need to pay taxes where you sold the game. The problem with these large companies is that they basically pay little to no taxes _anywhere_, an optimisation that only large companies can really afford.
- bluecalm 7y agoThey pay taxes where they are located. I am opponent of corporate income tax as I think it's the worse possible way to get about taxation. France is already collecting VAT on what Google sells there. They could increase that if they want. Why should it matter to them if Google turns profits or not? The concept of "profit from sells to France" isn't really well defined either, their profit depends on cost of operating and those depends on laws and regulations of the place they actually use to make their product.
- michaelmrose 7y ago>They pay taxes where they are located. The sale can trivially be said to occur in a different jurisdiction or they can make zero profit because that money is owed to a another company that exists to facilitate them not paying taxes. The only thing that they can't move is the customer which is why this makes sense.
- the-dude 7y agoNot to refute your point, but they surely already charge VAT. However, this is commonly described as a tax for the buyer, not the seller. On the other hand, most revenue is probably B2B and business reclaim their VAT.
- 99052882514569 7y agoCustomers buying from local businesses that compete with them also pay VAT, so the consumer side of it is fair. But local businesses themselves pay much more in corporate taxes, which is not. You are free to argue that the playing field can be likewise leveled by lowering corporate taxes to Ireland's levels. That's a debate for the French to have, as citizens of a sovereign country. It is not a decision to be forced on them by global tax loopholes.
- the-dude 7y agoI was not argueing anything.