3 ms·

Kind of like Vat is applied now - you’re from a given country, you pay more per month for a subscription

by kolinko 2y ago

rafaelmn 2y ago
But software/services are sold by EU companies (subsidiary)
- jillyboel 2y ago
  It's a nice accounting trick, but that's all it is.
- coldtea 2y ago
  If it's a subsidiary, there's a way to assosiate with the parent company.
  - michpoch 2y ago
    Sure, but then the other side can do the same. VW producing cars in their factories in the USA? Put a tariff on these cars as the parent company is based in Europe. It’s really not that simple, as e.g. big tech has their development centering the EU as well - so these products are at least partially produced here. If you want to write some custom rules, sure, but then you’re really opening a pandora box. Technically you could just add 100% tax just on vehicles that have Tesla in their name. Try making such moves and look as investors immediately drop any trust in your countries political system (and currency).
    - coldtea 2y ago
      >Sure, but then the other side can do the same That's expected. The other side already imposes some tarrifs (as did the EU - it's BS that Trump's tarrifs to EU are some unprecedented move, the EU already had tarrifs of US cars and other products). The problem we're discussing (at least according to a parent comment) is that the US has a lot more "digital services" products than actual physical products where EU tarrifs are currently applied. So, what's discussed is how to tax those (and how to sidestep "but it's a European subsidiary, not a US company" hurdle). So, sure the US can counter EU digital services by also using the same sidestepping. But it's not like EU has many such worth talking about. All the big players are from the US (Facebook, Google, Amazon, MS, etc).
DanielHB 2y ago
Software companies just open subsidiaries in the target country and sell services through the subsidiaries. The only thing this does is make it harder to move profit to the home country (and there are ways sound this) and add a lot of accounting work
wqaatwt 2y ago
What do you mean by that? That’s not how VAT works.
- kolinko 2y ago
  It is how it works. Go to any website with saas. If you mark eu as your country, you will be charged extra for vat. Or, going the other way - if you’re an EU company but your software users are outside EU, you don’t need to charge them VAT. When I was running Appcodes, I didn’t want to ask about the country directly, so I got an official opinion from Polish IRS that if I store geolocated IP address of registration and browser timezone for additional confirmation, it’s a good enough proof to not charge vat to consumers outside EU.

Kind of like Vat is applied now - you’re from a given country, you pay more per month for a subscription

rafaelmn 2y ago

But software/services are sold by EU companies (subsidiary)

jillyboel 2y ago
It's a nice accounting trick, but that's all it is.
coldtea 2y ago
If it's a subsidiary, there's a way to assosiate with the parent company.
- michpoch 2y ago
  Sure, but then the other side can do the same. VW producing cars in their factories in the USA? Put a tariff on these cars as the parent company is based in Europe. It’s really not that simple, as e.g. big tech has their development centering the EU as well - so these products are at least partially produced here. If you want to write some custom rules, sure, but then you’re really opening a pandora box. Technically you could just add 100% tax just on vehicles that have Tesla in their name. Try making such moves and look as investors immediately drop any trust in your countries political system (and currency).
  - coldtea 2y ago
    >Sure, but then the other side can do the same That's expected. The other side already imposes some tarrifs (as did the EU - it's BS that Trump's tarrifs to EU are some unprecedented move, the EU already had tarrifs of US cars and other products). The problem we're discussing (at least according to a parent comment) is that the US has a lot more "digital services" products than actual physical products where EU tarrifs are currently applied. So, what's discussed is how to tax those (and how to sidestep "but it's a European subsidiary, not a US company" hurdle). So, sure the US can counter EU digital services by also using the same sidestepping. But it's not like EU has many such worth talking about. All the big players are from the US (Facebook, Google, Amazon, MS, etc).

DanielHB 2y ago

Software companies just open subsidiaries in the target country and sell services through the subsidiaries. The only thing this does is make it harder to move profit to the home country (and there are ways sound this) and add a lot of accounting work

wqaatwt 2y ago

What do you mean by that? That’s not how VAT works.

kolinko 2y ago
It is how it works. Go to any website with saas. If you mark eu as your country, you will be charged extra for vat. Or, going the other way - if you’re an EU company but your software users are outside EU, you don’t need to charge them VAT. When I was running Appcodes, I didn’t want to ask about the country directly, so I got an official opinion from Polish IRS that if I store geolocated IP address of registration and browser timezone for additional confirmation, it’s a good enough proof to not charge vat to consumers outside EU.