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nope this tax scheme would only apply to certain corporations e.g. Revenue 0-20mln EUR, you keep the existing tax scheme Revenue 20-100mln - you can choose t

by lukasm 5y ago

nope this tax scheme would only apply to certain corporations e.g. Revenue 0-20mln EUR, you keep the existing tax scheme Revenue 20-100mln - you can choose the tax scheme Revenue 100mln+ - you have to tax revenue Thresholds are up for debate. Also, companies already pay around 0-5% of their revenue in income tax. Gigantic companies pay close to 0.

dkyc 5y ago
This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions and therefore directly incentivizes large, vertically integrated companies. You can try to work against it by arbitrary progressive taxation thresholds, but this doesn't change the underlying mathematics. Also, there's a reason why progressive taxation isn't widely implemented for corporations, because it's very easy to circumvent by splitting up and increasing the number of legal entities. A sensible way around that is taxing the _ultimate beneficiary_ rather than the company itself (i.e. the owners as natural persons), which is what GP suggests with "sales tax and personal income tax on salaries and distributions".
- lukasm 5y ago
  > This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions You can make the same argument about VAT. There is a cost on every transaction (split payment, money is frozen until you get a return). The incentive would be negligible comparing to other incentives for vertically integrated companies. > progressive taxation isn't widely implemented for corporations, because it's very easy to circumvent by splitting up and increasing the number of legal entities It's getting more popular and it's easy to draft a law that splitting companies, does not reduce the taxes (see GDPR) https://taxsummaries.pwc.com/poland/corporate/taxes-on-corporate-income https://taxsummaries.pwc.com/poland/corporate/taxes-on-corpo... > sensible way around that is taxing the _ultimate beneficiary_ rather than the company itself (i.e. the owners as natural persons), which is what GP suggests with "sales tax and personal income tax on salaries and distributions". It doesn't work in practice, because of tax heavens. Also, I can have a travel blog and a youtube channel when I review cars and clothes. Would I pay close to 0 in taxes. ---- All taxes are bad, but given current global world, revenue tax seems to be better, hence the digital tax in EU.
seanmcdirmid 5y ago
> Revenue 100mln+ - you have to tax revenue So banks and oil companies, which are naturally lots of revenue with a tiny amount of profit, would disappear, or become very small?
- ed_balls 5y ago
  > If your company cannot pay 1% of the revenue you don't have a viable business. Average corporation spends more on accounting and consulting. Accounting costs banks and oil companies around 0.8%, so the will be fine. I don't remember the exact number.
  - seanmcdirmid 5y ago
    Revenue is simply what you earn regardless of your costs. If some kind of business generates lots of revenues but has costs that are similar, then...they are screwed. You are basically proposing taxing money that moves through any company, regardless of the amount of money that has to pass out of it. Many companies just couldn't afford to exist anymore, we'd go back to hunting and gathering because even farming would no longer be economically viable. Oil companies have huge capital costs to find and extract resources, if you look at what their profits are compared to their costs of doing business, then obviously taxing revenue isn't going to work.
- lloda 5y ago
  You'd tax global profit based on the local revenue fraction. So if the corporation has global profits of 1M and the revenue is 90% in country A and 10% in country B, then country A taxes 0.9M of profit and country B taxes 0.1M of profit and neither has to care where the corporation is located 'for tax purposes'.

by lukasm 5y ago

dkyc 5y ago

This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions and therefore directly incentivizes large, vertically integrated companies. You can try to work against it by arbitrary progressive taxation thresholds, but this doesn't change the underlying mathematics. Also, there's a reason why progressive taxation isn't widely implemented for corporations, because it's very easy to circumvent by splitting up and increasing the number of legal entities. A sensible way around that is taxing the _ultimate beneficiary_ rather than the company itself (i.e. the owners as natural persons), which is what GP suggests with "sales tax and personal income tax on salaries and distributions".

lukasm 5y ago
> This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions You can make the same argument about VAT. There is a cost on every transaction (split payment, money is frozen until you get a return). The incentive would be negligible comparing to other incentives for vertically integrated companies. > progressive taxation isn't widely implemented for corporations, because it's very easy to circumvent by splitting up and increasing the number of legal entities It's getting more popular and it's easy to draft a law that splitting companies, does not reduce the taxes (see GDPR) https://taxsummaries.pwc.com/poland/corporate/taxes-on-corporate-income https://taxsummaries.pwc.com/poland/corporate/taxes-on-corpo... > sensible way around that is taxing the _ultimate beneficiary_ rather than the company itself (i.e. the owners as natural persons), which is what GP suggests with "sales tax and personal income tax on salaries and distributions". It doesn't work in practice, because of tax heavens. Also, I can have a travel blog and a youtube channel when I review cars and clothes. Would I pay close to 0 in taxes. ---- All taxes are bad, but given current global world, revenue tax seems to be better, hence the digital tax in EU.

seanmcdirmid 5y ago

> Revenue 100mln+ - you have to tax revenue So banks and oil companies, which are naturally lots of revenue with a tiny amount of profit, would disappear, or become very small?

ed_balls 5y ago
> If your company cannot pay 1% of the revenue you don't have a viable business. Average corporation spends more on accounting and consulting. Accounting costs banks and oil companies around 0.8%, so the will be fine. I don't remember the exact number.
- seanmcdirmid 5y ago
  Revenue is simply what you earn regardless of your costs. If some kind of business generates lots of revenues but has costs that are similar, then...they are screwed. You are basically proposing taxing money that moves through any company, regardless of the amount of money that has to pass out of it. Many companies just couldn't afford to exist anymore, we'd go back to hunting and gathering because even farming would no longer be economically viable. Oil companies have huge capital costs to find and extract resources, if you look at what their profits are compared to their costs of doing business, then obviously taxing revenue isn't going to work.
lloda 5y ago
You'd tax global profit based on the local revenue fraction. So if the corporation has global profits of 1M and the revenue is 90% in country A and 10% in country B, then country A taxes 0.9M of profit and country B taxes 0.1M of profit and neither has to care where the corporation is located 'for tax purposes'.