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The UK already does and so does Canada. https://www.gov.uk/government/publications/introduction-of-the-digital-services-tax/digital-services-tax https://www.gov

by beejiu 2y ago

The UK already does and so does Canada. https://www.gov.uk/government/publications/introduction-of-the-digital-services-tax/digital-services-tax https://www.gov.uk/government/publications/introduction-of-t... "The provision of a social media service, internet search engine or online marketplace by a group includes the carrying on of any associated online advertising service. An associated online advertising service is an online service that facilitates online advertising and derives significant benefit from its association with the social media service, search engine or online marketplace." Google Ads for instance invoices the tax to their customers. https://support.google.com/google-ads/answer/9750227?hl=en-GB https://support.google.com/google-ads/answer/9750227?hl=en-G...

specproc 2y ago
This tax was introduced as a straightforward way to actually get tax revenues out of a multi-billion dollar industry that does not come remotely close to paying its fair share of tax in the UK. The digital services tax was a limited counter to aggressive tax avoidance by US multinationals. Unfortunately, even though it's peanuts in the grand scheme of things, it's looking like it'll get offered up as sacrifice to the King in Orange. UK corporations are expected to pay ~20% corporation tax, individuals pay _substantially_ more on their incomes. We've got a generation that've had to endure continual cuts to public services because "there's no money left", whilst foreign corporations make money off our public virtually tax free. Google, Facebook etc., should pay their way or get out of our market.
- beejiu 2y ago
  That was the intent, but in reality the tax is fully remitted to Google's customers. I'm a small UK business and it appears on my invoice, so I'm effectively the one being taxed. This is why I object to the campaigners calling for 10% DST. They don't realise the tax is mostly remitted back onto UK businesses, not the trillion dollar giants.
  - specproc 2y ago
    Out of interest, is that an advertising invoice or something like GCP? I'm sorry, but until we can find a way to close down the countless other tax loopholes exploited by multinationals, I'd be completely happy with a 10% DST on any advertising targeting UK citizens. Low-hanging fruit.
    - beejiu 2y ago
      Google Ads specifically.
  - grues-dinner 2y ago
    What taxes on a business would not be eventually remitted to the customers?
    - beejiu 2y ago
      Businesses are traditionally taxed on their profits, not their turnover. Being a turnover tax, DST acts more like VAT does for consumers. Mathematically it has to be passed onto the customers, it just makes Google the collection agent on behalf of the government. This is why turnover taxes are such a bad idea.
      - grues-dinner 2y ago
        The companies in question virtually don't pay any tax on profits though, even though it's pretty clear they're making money hand over fist.
        beejiu 2y ago
        Yes, it's true, but digital services tax was only supposed to be temporary and the UK agreed to move away from it once a global tax system was negotiated at the OECD. https://www.gov.uk/government/news/uk-agrees-transition-toward-new-global-tax-system https://www.gov.uk/government/news/uk-agrees-transition-towa... I think those talks have ultimately stalled, so the right solution is getting back on track to a global tax system. (Interestingly the deal struck in 2021 exchanged the promise of no US tariffs with the transition away from DST. It's no surprise this is a hot topic again with Trump's tariff regime.)

by beejiu 2y ago

specproc 2y ago

This tax was introduced as a straightforward way to actually get tax revenues out of a multi-billion dollar industry that does not come remotely close to paying its fair share of tax in the UK. The digital services tax was a limited counter to aggressive tax avoidance by US multinationals. Unfortunately, even though it's peanuts in the grand scheme of things, it's looking like it'll get offered up as sacrifice to the King in Orange. UK corporations are expected to pay ~20% corporation tax, individuals pay _substantially_ more on their incomes. We've got a generation that've had to endure continual cuts to public services because "there's no money left", whilst foreign corporations make money off our public virtually tax free. Google, Facebook etc., should pay their way or get out of our market.

beejiu 2y ago
That was the intent, but in reality the tax is fully remitted to Google's customers. I'm a small UK business and it appears on my invoice, so I'm effectively the one being taxed. This is why I object to the campaigners calling for 10% DST. They don't realise the tax is mostly remitted back onto UK businesses, not the trillion dollar giants.
- specproc 2y ago
  Out of interest, is that an advertising invoice or something like GCP? I'm sorry, but until we can find a way to close down the countless other tax loopholes exploited by multinationals, I'd be completely happy with a 10% DST on any advertising targeting UK citizens. Low-hanging fruit.
  - beejiu 2y ago
    Google Ads specifically.
- grues-dinner 2y ago
  What taxes on a business would not be eventually remitted to the customers?
  - beejiu 2y ago
    Businesses are traditionally taxed on their profits, not their turnover. Being a turnover tax, DST acts more like VAT does for consumers. Mathematically it has to be passed onto the customers, it just makes Google the collection agent on behalf of the government. This is why turnover taxes are such a bad idea.
    - grues-dinner 2y ago
      The companies in question virtually don't pay any tax on profits though, even though it's pretty clear they're making money hand over fist.
      - beejiu 2y ago
        Yes, it's true, but digital services tax was only supposed to be temporary and the UK agreed to move away from it once a global tax system was negotiated at the OECD. https://www.gov.uk/government/news/uk-agrees-transition-toward-new-global-tax-system https://www.gov.uk/government/news/uk-agrees-transition-towa... I think those talks have ultimately stalled, so the right solution is getting back on track to a global tax system. (Interestingly the deal struck in 2021 exchanged the promise of no US tariffs with the transition away from DST. It's no surprise this is a hot topic again with Trump's tariff regime.)