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It'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

It'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 ago
  They 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.
black_puppydog 7y ago
apart from that they take advantage of there even being people who can be advertised to (i.e. who have the means to buy stuff, to be even worth advertising to) facebook etc certainly make use of the digital infrastructure in place. I'm writing this via a glass fiber connection supplied by "Orange" (formerly known as France Telecom)
mars4rp 7y ago
it is more like, you are putting your product in their shops and not paying any tax on it!
- bluecalm 7y ago
  That doesn't make any sense. I am actually delivering it to customers myself, run the accounting, run the store. I don't use their real estate, their roads, electricity, anything. How is it anything like putting my product in their stores?
  - ziddoap 7y ago
    How are you delivering it to the customer without using their roads, electricity, or "anything"?
the-dude 7y ago
Try bringing much more expensive items across a border and you will see what happens ( you will be taxed at the border ).
- bluecalm 7y ago
  Yeah, I will pay VAT and maybe tariffs. Both are perfectly fine taxes. Google is already paying VAT on sells to France. France could increase those on electronic advertising if they want to and Google will pay that.
  - gamblor956 7y ago
    Google does not pay VAT. The buyer pays VAT, and Google collects and remits it on behalf of the buyer. Google only pays VAT on purchases (for its own use) that it will sell on to customers.
99052882514569 7y ago
>It's really not that simple. They don't use any of the country infrastructure or workers. They absolutely do. They implicitly use courts, police, customs, trademark/contract enforcement, etc.
victorNicollet 7y ago
It's true that when a French person comes to your country to buy your product, then goes back to France, the burden is on them to pay the relevant customs and taxes. On the other hand, I would argue that the market of people who would come to your country to buy your product is significantly smaller than the market of people who buy it on the internet and have it delivered---and it's fairly typical for companies sending products to France to be asked to collect any duties, customs and taxes from the purchaser. Why would electronic delivery be different ?
inflatableDodo 7y ago
>If I make a video game and sell it to a person in France does it mean I do business in France? Yes.
gamblor956 7y ago
If I make a video game and sell it to a person in France does it mean I do business in France? Yes, by the commonly and globally accepted definition of "doing business" in a country, selling into a country is doing business in that country. It seems to me it should be treated the same as French person coming to my country, buying my game and going back home. No, it would be more like your company going to France, selling the French guy the game, and then coming back to the US. The burden of tax compliance is placed on you, the seller, because you are the one profiting from the activity and therefore morally (and legally) should shoulder the burden. 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. It's exactly consistent with general tax law in the US and internationally. It's not practical, but that's the price you pay for choosing to make money in another taxing jurisdiction. If you don't want to deal with it, make money somewhere else. That being said, the US has a good treaty network so that the situation you describe generally wouldn't result in income tax to the US seller unless they had a physical presence in the country of the buyer. Which is exactly why the French tax at issue is an excise tax (not subject to treaty restrictions) and not an income tax (covered by treaty restrictions).
- d1zzy 7y ago
  > No, it would be more like your company going to France, selling the French guy the game, and then coming back to the US. The burden of tax compliance is placed on you, the seller, because you are the one profiting from the activity and therefore morally (and legally) should shoulder the burden. I don't think that's as clear as you try to make it be. Both parties (seller and buyer) are doing something that is in their best interest, one is acquiring a product/service for some money, the other is selling it for the money. In both cases it serves their interests, both have a moral responsibility in regards to the exchange. And you see this reflected in tax laws too where both companies and consumers pay taxes relevant to a transaction.
  - gamblor956 7y ago
    I'm an international tax lawyer dude... The seller is making money. That's what matters from a moral and legal perspective. Everywhere. It doesn't matter that the buyer is possibly also getting a benefit. And you see this reflected in tax laws too where both companies and consumers pay taxes relevant to a transaction. Please list even one location where both the buyer and the seller pays the transaction tax. Here's a hint: there isn't one. Either the buyer pays, or the seller pays. However, for nearly every transaction tax, the seller collects the tax on behalf of the government and remits that amount to the appropriate tax authority. (In Hawaii and Australia, the seller actually pays the tax--GET or GST, respectively-- but is permitted to pass along the tax to the customer as a separate line item on the invoice. In Hawaii, the seller then owes more tax for the additional charge to the customer.) Note also: withholding taxes on cross-border payments are not transaction taxes. They're income taxes, which is a very different thing.

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 ago
They 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.

black_puppydog 7y ago

apart from that they take advantage of there even being people who can be advertised to (i.e. who have the means to buy stuff, to be even worth advertising to) facebook etc certainly make use of the digital infrastructure in place. I'm writing this via a glass fiber connection supplied by "Orange" (formerly known as France Telecom)

mars4rp 7y ago

it is more like, you are putting your product in their shops and not paying any tax on it!

bluecalm 7y ago
That doesn't make any sense. I am actually delivering it to customers myself, run the accounting, run the store. I don't use their real estate, their roads, electricity, anything. How is it anything like putting my product in their stores?
- ziddoap 7y ago
  How are you delivering it to the customer without using their roads, electricity, or "anything"?

the-dude 7y ago

Try bringing much more expensive items across a border and you will see what happens ( you will be taxed at the border ).

bluecalm 7y ago
Yeah, I will pay VAT and maybe tariffs. Both are perfectly fine taxes. Google is already paying VAT on sells to France. France could increase those on electronic advertising if they want to and Google will pay that.
- gamblor956 7y ago
  Google does not pay VAT. The buyer pays VAT, and Google collects and remits it on behalf of the buyer. Google only pays VAT on purchases (for its own use) that it will sell on to customers.

99052882514569 7y ago

>It's really not that simple. They don't use any of the country infrastructure or workers. They absolutely do. They implicitly use courts, police, customs, trademark/contract enforcement, etc.

victorNicollet 7y ago

It's true that when a French person comes to your country to buy your product, then goes back to France, the burden is on them to pay the relevant customs and taxes. On the other hand, I would argue that the market of people who would come to your country to buy your product is significantly smaller than the market of people who buy it on the internet and have it delivered---and it's fairly typical for companies sending products to France to be asked to collect any duties, customs and taxes from the purchaser. Why would electronic delivery be different ?

inflatableDodo 7y ago

>If I make a video game and sell it to a person in France does it mean I do business in France? Yes.

gamblor956 7y ago

If I make a video game and sell it to a person in France does it mean I do business in France? Yes, by the commonly and globally accepted definition of "doing business" in a country, selling into a country is doing business in that country. It seems to me it should be treated the same as French person coming to my country, buying my game and going back home. No, it would be more like your company going to France, selling the French guy the game, and then coming back to the US. The burden of tax compliance is placed on you, the seller, because you are the one profiting from the activity and therefore morally (and legally) should shoulder the burden. 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. It's exactly consistent with general tax law in the US and internationally. It's not practical, but that's the price you pay for choosing to make money in another taxing jurisdiction. If you don't want to deal with it, make money somewhere else. That being said, the US has a good treaty network so that the situation you describe generally wouldn't result in income tax to the US seller unless they had a physical presence in the country of the buyer. Which is exactly why the French tax at issue is an excise tax (not subject to treaty restrictions) and not an income tax (covered by treaty restrictions).

d1zzy 7y ago
> No, it would be more like your company going to France, selling the French guy the game, and then coming back to the US. The burden of tax compliance is placed on you, the seller, because you are the one profiting from the activity and therefore morally (and legally) should shoulder the burden. I don't think that's as clear as you try to make it be. Both parties (seller and buyer) are doing something that is in their best interest, one is acquiring a product/service for some money, the other is selling it for the money. In both cases it serves their interests, both have a moral responsibility in regards to the exchange. And you see this reflected in tax laws too where both companies and consumers pay taxes relevant to a transaction.
- gamblor956 7y ago
  I'm an international tax lawyer dude... The seller is making money. That's what matters from a moral and legal perspective. Everywhere. It doesn't matter that the buyer is possibly also getting a benefit. And you see this reflected in tax laws too where both companies and consumers pay taxes relevant to a transaction. Please list even one location where both the buyer and the seller pays the transaction tax. Here's a hint: there isn't one. Either the buyer pays, or the seller pays. However, for nearly every transaction tax, the seller collects the tax on behalf of the government and remits that amount to the appropriate tax authority. (In Hawaii and Australia, the seller actually pays the tax--GET or GST, respectively-- but is permitted to pass along the tax to the customer as a separate line item on the invoice. In Hawaii, the seller then owes more tax for the additional charge to the customer.) Note also: withholding taxes on cross-border payments are not transaction taxes. They're income taxes, which is a very different thing.