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This sort of thing really needs to be coordinated on EU level. Having different countries doing this in their own way isn't going to work out well in the end. B

This sort of thing really needs to be coordinated on EU level. Having different countries doing this in their own way isn't going to work out well in the end. But it's clear something needs to be done. Taxes should be extracted on profits, where the profits are generated. But doing this properly would require re-thinking _a lot_ of how businesses are taxed, not only digital giants. Anyone who uses schemes where IP is sold between various sister companies and finally profits are generated in some tax haven, would be targeted in a revamp of this kind. This would be a massive upheaval.

fuddy 1y ago
Doing everything in a chaotic uncoordinated manner helps local companies and the biggest international players eliminate smaller foreign players..
sumedh 1y ago
> Taxes should be extracted on profits, where the profits are generated. No need to make it so complicated, if a company have revenue above X billion then pay X% tax on the revenue local or global revenue.
spwa4 1y ago
You forget that EU countries are adversaries, especially where it comes to tax (ie. money for the government to spend). Ireland has a minimum tax rate for international companies, with deductions for employment (as in numbers). It's not a coincidence what's happening.
- alkonaut 1y ago
  Yes, but the EU are "collaborating" adversaries in a lot of ways. There is a lot of pressure that can (and is) being put on e.g. Ireland for this.
snapplebobapple 1y ago
Corporate lawyers would argue this is already happening and they are partially correct its a really tough problem because there are valid points on both sides. Take a simple product. Say all the design and development work happens globally to create IP that is the how of the product. Production and integration into a product happens in southeast asia. Sales happen globally but lets look at a sale in Germany. If you sell it for Y , you manufacture it for X and you have a large sunk cost for the IP you need to recover C, your profit is Y-X - C/units sold. Units sold is unknown until you finish selling the product potentially years later. It's not at all cut and dry which part should get allocated what profit. What Germany is doing with this tax is arbitrarily pushing more of the profit to the end sale, where potentially none of the work to make the product and very minimal to none of the design work may have been done, which isn't necessarily right/fair/justified.
- alkonaut 1y ago
  Yes, this is arbitrary. So e.g in Germany there would be an argument about how much of the ad revenue Facebook does in Germany should be reduced by R&D costs that happened elsewhere.å
  - snapplebobapple 1y ago
    why wouldn't it be reduced by R&D costs that happened elsewhere? if the German flew to wherever the R&D costs were incurred they would certainly be charged and net profit would be figured out accounting for those costs. if a German distributor bought whatever the product was and imported it to Germany they would be charged for those R&D costs and they would show an arms length transaction proving their profit was less by said R&D costs and if the government charged them tax as if they weren't charged for those R&D costs they would go out of business because they would not be profitable/have to spend so much estimating what portion of what they were charged was R&D (because they don't know and can't know for sure).
    - alkonaut 1y ago
      > why wouldn't it be reduced by R&D costs that happened elsewhere? It would be reduced. The profit can’t be 100% of their German as revenue because obviously they have costs elsewhere. But the argument of some countries is now that it also can’t be 0%.

fuddy 1y ago

Doing everything in a chaotic uncoordinated manner helps local companies and the biggest international players eliminate smaller foreign players..

sumedh 1y ago

> Taxes should be extracted on profits, where the profits are generated. No need to make it so complicated, if a company have revenue above X billion then pay X% tax on the revenue local or global revenue.

spwa4 1y ago

You forget that EU countries are adversaries, especially where it comes to tax (ie. money for the government to spend). Ireland has a minimum tax rate for international companies, with deductions for employment (as in numbers). It's not a coincidence what's happening.

alkonaut 1y ago
Yes, but the EU are "collaborating" adversaries in a lot of ways. There is a lot of pressure that can (and is) being put on e.g. Ireland for this.

snapplebobapple 1y ago

Corporate lawyers would argue this is already happening and they are partially correct its a really tough problem because there are valid points on both sides. Take a simple product. Say all the design and development work happens globally to create IP that is the how of the product. Production and integration into a product happens in southeast asia. Sales happen globally but lets look at a sale in Germany. If you sell it for Y , you manufacture it for X and you have a large sunk cost for the IP you need to recover C, your profit is Y-X - C/units sold. Units sold is unknown until you finish selling the product potentially years later. It's not at all cut and dry which part should get allocated what profit. What Germany is doing with this tax is arbitrarily pushing more of the profit to the end sale, where potentially none of the work to make the product and very minimal to none of the design work may have been done, which isn't necessarily right/fair/justified.

alkonaut 1y ago
Yes, this is arbitrary. So e.g in Germany there would be an argument about how much of the ad revenue Facebook does in Germany should be reduced by R&D costs that happened elsewhere.å
- snapplebobapple 1y ago
  why wouldn't it be reduced by R&D costs that happened elsewhere? if the German flew to wherever the R&D costs were incurred they would certainly be charged and net profit would be figured out accounting for those costs. if a German distributor bought whatever the product was and imported it to Germany they would be charged for those R&D costs and they would show an arms length transaction proving their profit was less by said R&D costs and if the government charged them tax as if they weren't charged for those R&D costs they would go out of business because they would not be profitable/have to spend so much estimating what portion of what they were charged was R&D (because they don't know and can't know for sure).
  - alkonaut 1y ago
    > why wouldn't it be reduced by R&D costs that happened elsewhere? It would be reduced. The profit can’t be 100% of their German as revenue because obviously they have costs elsewhere. But the argument of some countries is now that it also can’t be 0%.