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>3% tax on revenues earned on digital services in France A tax on revenues???? Not on profits, but on revenues, which do not deduct operating costs???? It loo

• JanSt 7y ago
  It's because the internet giants always declare zero profit, because they pay their own subsidiary in a tax haven a high "license fee". France tries to close that loophole.
  • tonfa 7y ago
    Is that correct? Note that the US does no longer allow deferred taxation of foreign income (which was what was happening before 2017). (Even at the time, money stashed overseas was still subject to US taxation, though it could be deferred until repatriation, so calling it untaxed was somewhat misleading)
    • JanSt 7y ago
      Yes, it is correct and has nothing to do with deferred US taxes. They avoid paying taxes in France, Germany, etc. by transfering the profit to (for example) Ireland where they are taxed at extremely low rates. This is not about US taxation.
      • derriz 7y ago
        This is not correct and it has everything to do with US corporate tax deferral. The accounts for Apple in Ireland only includes profits created by the value added in Ireland (relatively small) and profits on sales in Ireland (ditto). All the rest accrues to the US parent company. This is a matter of record.
        • JanSt 7y ago
          France does absolutely not care whether the money is taxed in the US or not. They want to tax the money internet giants make in France. All the money these companies make is shifted (by "license agreements") into tax havens, thus they don't see a penny. Apple Ireland did definetly not only include profits made in Ireland (only after shifting them to Ireland, which kind-of made them Ireland profit but ripped off everyone else). edit: For reference - Apple booked $120bn revenue[1] in Ireland in 2017, which amounts to $18,461 per inhabitant. [1] http://www.top1000.ie/companies http://www.top1000.ie/companies
          • derriz 7y ago
            Where a company books revenue has pretty much nothing to do with corporation tax which is based on _profit_. This discussion has no chance of being productive if the distinction between profit and revenue is constantly blurred. It wouldn't matter if Apple had booked $120bn revenue in France as it's only the _PROFIT_ booked in France which is taxable. What France wants to do has to be compatible with the decades of building international consensus and rules on taxing supply chains that span the globe. Unless they want to see their car, aviation, food, etc. exports subjected to revenue based taxation in international markets. Taxing revenues of imports is a called a "duty" nothing to do with corporation tax.
            • JanSt 7y ago
              I gave you the revenue number so that you understand that Apple has been shifting their European business through Ireland to avoid paying taxes elsewhere. Okay, let's talk about profit. $34bn in 2014, so not even at the peak. Apple made $34bn profit in Ireland and pretty much none elsewhere in the EU? > Unless they want to see their car, aviation, food, etc. exports subjected to revenue based taxation in international markets. Surprise surprise, European countries have to pay profit taxes in the US. Those profits cannot be shifted as easily as digital profits.
              • derriz 7y ago
                The revenue number is irrelevant when it comes to corporation tax, don't you agree? If you do agree, why mention it? The discussion is complex enough without introducing unrelated numbers. The figures I've seen published suggest that Apple declares 3 or 4bn _PROFIT_ a year on their Irish operations. This is about 3 or 4% of the REVENUE which passed through the Irish operations which does not seem unreasonable for a logistics operation. Apple makes 35% or 40% margin on sales which means that the VAST amount of profit is booked in the US. > European countries have to pay profit taxes in the US This is simply not true. I've been involved in selling stuff to the US from Europe and we did NOT have to pay "profit taxes" on our sales.
      • Mirioron 7y ago
        So, when countries like Ireland benefit from the EU it's bad, but when countries like France benefit from the EU then it's fine?
        • boomboomsubban 7y ago
          Though some Irish members of the EU benefit, it harms the EU as a whole. That's why it's bad, not because Ireland is benefitting.
          • Mirioron 7y ago
            I understand what you're saying, but lots of things harm other EU members while benefiting some. That's why many countries joined the EU in the first place.
            • boomboomsubban 7y ago
              They joined because they could see how harming some states in certain scenarios benefits the EU as a whole.
      • tonfa 7y ago
        In the end the remaining profit is declared and taxed in the US, right? I agree many countries would like a bigger share, but it does not seem obvious why France or Germany deserve a bigger share, when the product is developed elsewhere. Historically product development is where the value is created (so mostly US). With digital services, the EU feels like it's missing out on tax revenue and to that purpose argues that the consumer creates value instead.
  • derriz 7y ago
    This isn't true - public corporations are obliged to publish accurate accounts which include the profits of their subsidiaries. Even an very basic overview like https://www.apple.com/newsroom/2019/04/apple-reports-second-quarter-results/ https://www.apple.com/newsroom/2019/04/apple-reports-second-... includes "international" profits. The confusion here is cause by the (internationally unique as far as I know) American tax rule that allowed US corporations to defer paying their US corporate tax bill. The tax liability still exists. Effectively the rule gave US corporations with large amounts of international profit an indefinite interest free loan. I'm guessing that the rule was introduced (or at least not suspended earlier) because it acted as a sort of subsidy for US corporations to grow international markets for their products. While the form of this subsidy is unique, many countries indirectly subsidize overseas expansion for companies founded in their jurisdiction, for example by funding export insurance schemes and the like.
    • derriz 7y ago
      I'm getting downvoted for responding to the claim "internet giants always declare zero profit" - which can be trivially refuted by cursory search. Alphabet declared a profit of about 7 billion dollars for Q1, 2019 - which is not zero. Apple declared around 11 billion for the same period - also non-zero. Facebook declared 3.5 billion, etc. etc. So no, internet giants do NOT declare zero profit.
      • luckylion 7y ago
        > So no, internet giants do NOT declare zero profit. Right, but this is about France, where they didn't declare a profit of 7 billion dollars. Let's refrain from trying to be technically correct by not looking at the context of comments and then arguing against a straw man.
      • JanSt 7y ago
        You are downvoted because you are ignoring the context. This is not about declaring zero profit in the US but in many EU countries - i.e. France. Now these countries fight back. https://en.wikipedia.org/wiki/EU_illegal_State_aid_case_against_Apple_in_Ireland https://en.wikipedia.org/wiki/EU_illegal_State_aid_case_agai... ps: I didn't downvote you
• omnimus 7y ago
  This type of tax is gonna happen all around eu. The reason being - big digital services pay almost zero taxes by doing clever tax tactics and moving all their revenues to tax havens.
  • adventured 7y ago
    It's a ringing admission that the EU is entirely broken, they can't control their own tax havens in any manner. Since they can't manage that, they've begun implementing arbitrary tax schemes against revenue. The extremely obvious, proper solution is to curtail the tax havens within the EU.
    • phtrivier 7y ago
      It would be "obvious" if taxation was not one of the topics where the EU is specifically structured to not have much power, and leave it to sovereign states. So it would be a matter of making Ireland raise it's taxation rates. I suspect a number of companies, some of which have a fruit as a logo placated on their headquarters far across a certain ocean, would object to that.
    • anherome21003 7y ago
      That's untrue. The EU is a great system and Junker is a great leader. Please educate yourself
  • alt_f4 7y ago
    There's an argument to be made that they also don't use anything in that country because they're digital services. And, supposedly, taxes are to pay for infrastructure? Although these days the view seems to be, let's just take as much money as possible, even if nothing / very little is provided in return.
    • claudius 7y ago
      Digital services also use infrastructure, e.g. broadband, landlines, electricity etc., much of which is at least partially subsidised by taxes.
• js4ever 7y ago
  Indeed, this is exactly why I left france few years ago. I noticed your message was downvoted, be careful there is a lot leftists here on HN, don't say too direct things like this, truth is hurting them a lot.
• raducu 7y ago
  What about property tax where you pay % of your property valuation without having any revenues, how is that fair?