10 ms·

Italy Approves ‘Google Tax’ on Internet Companies

39 points by snowbunny 13y ago

davidgerard 13y ago
The EU objection is pretty solid, sadly.
- aristidb 13y ago
  Why sadly?
- alemhnan 13y ago
  The objection reported in the article seems to me quite usual political boilerplate without real substance. One of the comments says something interesting: "Europe will have to address the fiscal treatment of multinationals, and by its nature, this is not a task to be faced on a piecemeal basis." That sounds more the real issue of the problem to me.
toyg 13y ago
Italy: always at the forefront of legislative innovation to kill the internet. Piratebay blocks? Check. Fighting encryption and anonimity? Check. Taxing the crap out of anything that moves? Check. Cutting investments in r&d and universities across thr board? Check. And then they wonder why their economy sucks.
- tluyben2 13y ago
  They are doing that in most EU countries, not only Italy or the PIGS. I would say the PIGS have a lot of reasons besides maybe this why they are going badly; simple things like being anti-client-friendly as much as possible and finding that normal.
  - _delirium 13y ago
    I have a little experience in several EU countries, and if there's any correlation, it's generally in the other direction, with the higher-tax ones generally being better places to do business (I doubt this is a causal relationship, though). The issue with southern Europe is that the government is corrupt, slow, and non-transparent, and regulations are unpredictable and inconsistently enforced. For example, Denmark's taxes are about 1.5x Greece's (50% of GDP versus 35% of GDP, overall). But Denmark is generally a nicer and easier place to do business. The bureaucracy is large and expensive, but in return for all the money it costs, you get quick, non-corrupt, predictable service. You can register a company in literally hours (online!), for example, while it takes weeks in lower-tax Greece.
    - tluyben2 13y ago
      Well that last example shows some of the PIGS problems which actually do make it bad business places; the 'mañana‎' thing is deeply ingrained because (I think and hope), before, they didn't really have to care. Although it's been 40-60 years since that was true, it's very much real in all of them. Portugal is moving away from that faster than the others in my experience.
- mino 13y ago
  Regarding "piratebay blocks" and, more generically, DNS censorship: recently, RIPE published [1] usage estimations of 8.8.8.8 by country. It is estimated that 12% of Italian internet users has configured 8.8.8.8 on their machine, which I believe is an astonishing high number! I work at an Italian ISP and we ran some statistics ourselves and found that percentage to be around 5%, which is lower but still massive. If you consider that the average Internet user doesn't even know what "DNS" is... that means a considerable part of tech-savy users are not using their ISP's DNS (which breaks down many kind of things, among which CDNs). That's a direct consequence of Government-issued DNS censorship, which all Italian ISP need to obey. [1] https://labs.ripe.net/Members/gih/measuring-googles-public-dns https://labs.ripe.net/Members/gih/measuring-googles-public-d...
  - belorn 13y ago
    > that means a considerable part of tech-savy users are not using their ISP's DNS (which breaks down many kind of things, among which CDNs). Is every CDN's depended on privileged position inside ISP's? DNS by design is on the edge of the network, and works perfectly fine regardless of who ask the server for a lookup. If the DNS server want to do geo-depended service, they only have to use geo-ip to figure out where a request is coming from and sending the closest geo-located server as answer. You can even do it with http server and redirects. ISP based dns resolver existed because early networks took time and money to send a single package back and forth from the client to the server. Those economics should not be considered in 2013. Having a third-party doing your dns resolving is like calling the local police office for directions when driving. Antiquated, unnecessary, and not very safe any more for privacy reasons.
    - waps 13y ago
      DNS requests do not specify who requests the IP address. So think of the problem a CDN has : it has to identify the requesting party's geographical location, based on where the request comes from. If it comes from 8.8.8.8 then you've got no clue. If it comes from an ISPs recursive DNS you can guess : most ISPs have limited geographical reach. If it comes from Telecom Italia's DNS servers, it's either Italy or the middle east (and due to seabone, you will feed them the same entry point to the CDN) When a request comes from Google (or for that matter, another global network like Level3) you have a problem. The request doesn't specify where the client is, and the request will be cached. So what do you do ? Which entrypoint do you feed it ? You're essentially stuck with anycast, and that has it's own problems.
- jessedhillon 13y ago
  This is a far too simplistic analysis of a multifaceted issue with no single answer. It's the kind of thing I'd expect to hear on Fox.
  - olefoo 13y ago
    Yes. I believe it's an artefact of the popularity of the site that that type of comment is becoming more common. We've seen a noticeable increase in trolling and simplistic bias-driven comments over the past year (i.e. comments that suggest that the commenter cannot even conceive why someone might not share their viewpoint).
    - chronic25 13y ago
      No.
  - toyg 13y ago
    It's not an analysis, it's a rant, sure. BUT as an Italian, I've seen this over and over and it sickens me. Italy is one of those very few countries where for years you couldn't legally run an open wifi spot - you had to file ID cards of each and every user, and send them to the police on request. Where the early cypherpunk scene was criminalised and associated with terrorism - the police would just sequester entire servers on a whim, just to collect SSH keys and mailing lists of activists. Where authorities cracked down hard on P2P while at the same time supporting a copyright regime that is much worse than the equivalent US one (the association of publishers and music labels is legally tasked of collecting royalties and copyright-related taxes, with no oversight whatsoever on where the money actually ends up). Where law-mandated DNS blocks were pioneered. All this in a country with corruption and organised crime at levels unseen elsewhere in Europe, an economy that's been stalling for almost 20 years now, a huge anti-business bureaucracy, and gigantic public debt. It's like, "don't you have anything more urgent to worry about, rather than bothering our Net with laws so inane, even the EU will likely strike them down?" If this sounds like something out of Fox, I invite you to watch any political talk-show on Italian TV. You think Fox is bad? HA! The problem at hand is not complicated, but it's something that 1) must be solved at the European level (otherwise, why did we create a unified market?), 2) does not touch real revenues being siphoned to tax havens, which are the real problem -- does Apple sell ads or internet services? not really, but they're THE prime example of this problem, and still won't be touched by this law. It's the usual buffoonery devised by one of the worst political and economic elites in the developed world.
Dylan16807 13y ago
Google, Starbucks Corp. (SBUX) and Amazon.com Inc. have been criticized for strategies that shift billions of dollars of profits offshore.[...] Google last year moved nearly $12 billion to the Bermuda unit, the majority of its worldwide income, cutting more than $2 billion off its global income tax bill. Google’s Italian unit last year reported total income taxes of just 1.8 million euros, corporate filings show. Google's tax-avoidance has nothing to do with this new law. It's true that Google shifts profits around to avoid paying taxes where they do their actual labor. But changing that wouldn't change the fact that Google isn't based in Italy. For the sake of simplicity let's say that Google stayed in Ireland when they stopped abusing the system. They would sell all their European ads from Ireland, and pay a hefty tax with no loopholes. And their tax payments in Italy... would not change. This law is strictly anti-outsourcing. It does nothing to stop Google's tax avoidance, and would still be just as 'needed' even if Google didn't avoid taxes. Bringing it up muddies the water and serves no purpose other than making Google look like a bad guy.
- alemhnan 13y ago
  Maybe I'm wrong, but with this law Google is not able to sell ads in Italy. So if they still want to do that they need to open an Italian company and therefore pay taxes in Italy. So, for Italy at least, things would change.
  - Dylan16807 13y ago
    Right, but blocking sales to another country has absolutely nothing to do with how an entity in another country pays their taxes. Italy is objecting only to the fact that the ad-selling-Google is in another country, and trying to make them build a local version.
  - tonfa 13y ago
    Depends, what is taxed in Italy: profit or revenue? An italian subsidiary would have to pay its mother company for the services it provides (which is everything, since no user would be serviced from Italy). So the Italian company could easily make 0 (or very few) profit.
anoncow 13y ago
I don't understand. If I want to use AdWords and if Google is still selling from Ireland,what do I do? Buying ads from Italianads.com is not going to make my ads appear on Google.
carlob 13y ago
The biggest problem with this law is not its effect on google: the way it's written now forbids any Italian internet user from visualizing ads that were not purchased from an Italian company, and this applies to all websites. So while Google might be forced to comply, most international websites won't, rendering them automatically illegal in Italy, which is probably unenforceable. While I agree with the spirit of making these large multinational companies pay their fair share of taxes I think this is a rather ham fisted attempt.
- gioi 13y ago
  Have you read the law? Do it. Rendering is not illegal, but if you're an Italian company you can buy online ads only from another Italian company.
  - jamesaguilar 13y ago
    It puts Italian companies at a significant disadvantage in online advertising, which is fascinating. I wonder how many marginal companies will be incorporated outside Italy's borders because of this law. It will be fascinating to see the analysis come down in ten or fifteen years (assuming the law lasts that long).
  - carlob 13y ago
    Pardon the italian 17-bis. Al decreto del Presidente della Repubblica 26 ottobre 1972, n. 633, dopo l'articolo 17 è inserito il seguente: «Art. 17-bis – 1. I soggetti passivi che intendano acquistare servizi on line sia mediante operazioni di commercio elettronico sia diretto che indiretto, anche attraverso centri media e operatori terzi, sono obbligati ad acquistarli da soggetti titolari di una partita IVA rilasciata dall'amministrazione finanziaria italiana. 2. Gli spazi pubblicitari on line e i link sponsorizzati che appaiono nelle pagine dei risultati dei motori di ricerca (servizi di search advertising), visualizzabili sul territorio italiano durante la visita di un sito internet o la fruizione di un servizio on line attraverso rete fissa o rete e dispositivi mobili, devono essere acquistati esclusivamente attraverso soggetti, quali editori, concessionarie pubblicitarie, motori di ricerca o altro operatore pubblicitario, titolari di partita IVA rilasciata dall'amministrazione finanziaria italiana. La presente disposizione si applica anche nel caso in cui l'operazione di compravendita sia stata effettuata mediante centri media, operatori terzi e soggetti inserzionisti. Says here that the law applies to results visible on Italian territory.
gioi 13y ago
I'm Italian. Here tax burden for artisans, small business, big companies is over 50%. What if we could shift part of the taxation from artisans to big multinationals? What's wrong with this idea?
- Heliosmaster 13y ago
  That it does not lower at all taxes on common people and normal jobs. Large corporations who have interests (and money to enforce it) will always find a way (at least political). This is the usual attempt from our politicians, who have no idea how a computer is turned on (no wait.. they play poker on their ipad while discussing laws), to regulat something they do not understand.
  - gioi 13y ago
    I asked what's wrong with the idea, not with the implementation. I completely agree with the fact that this law should have been discussed at international level (at least EU+USA). I can realize from your words all your discouragement for the global ethical crisis. I really hope that future generations will be able to enforce this kind of measures. (BTW, may I ask you where are you from?)
- yetanotherphd 13y ago
  The problem is that you are erecting trade barriers in order to do this, by forcing ads to be sold in Italy. And the deeper problem is that every country would like to shift its tax burdens to "big multinationals" but there are tax and trade agreements to impose some fairness and order. If an advertising company really were running some of their operation from Italy, they should certainly pay tax there (and not, say, in Ireland). But you can't expect to tax all ads that are purchased by Italians that really are sold from overseas.
  - vkou 13y ago
    Said tax and trade agreements don't impose fairness and order, as much as they tie every participating nation down in a race to the bottom. Any board of directors would be considered to be out of their minds if for the sake of a single, non-critical contract, they signed agreements that completely tied their hands in how their firm should run. On the other hand, when governments do it, they are heroes. Disclaimer: I'm a Canadian working for Google. And I have no opinion on this particular piece of legislature.
jotm 13y ago
How about making the country a better place to start a company instead? You know, so you can attract foreign capital and entrepreneurs, and also reduce the local brain drain. No wonder Italians run to Germany, UK and Ireland to start their companies. Also, good luck enforcing that law.
- mortyseinfeld 13y ago
  Because that takes too much strategic thinking for these spastic, greedy bureaucrats.
- raverbashing 13y ago
  You'll be surprised about the hassles to open an (Internet) company in Germany. They get the business mostly because they are cheap (and educated workforce, of course)
  - jotm 13y ago
    I don't know from first hand experience, but I've been told that it's relatively easy to open a UG (their version to an LLC/UK LTD) company and start working right away. Hiring and managing employees seems to be the hardest part.
    - raverbashing 13y ago
      Yes, the issues are mainly in hiring, labour code, and also privacy and IP issues. Privacy is a big deal in Germany. (And of course, doing all that in German, but in Berlin it's easy to do things in English. But not everybody speaks English)
znowi 13y ago
Google became too greedy and this is the result of it. I, for one, in support of this law. You can't harvest billions of profit worldwide, then sneak it all through tax heavens and expect it to continue indefinitely. Someone will get weary of this practice. As a thought experiment, imagine the US reaction if Google was an Italian company - making loads of money in the US and paying 0 taxes :)
- was_hellbanned 13y ago
  The point becomes moot if you eliminate corporate income tax. You want companies to pay salaries, not taxes.
  - ansgri 13y ago
    Good point. Could you please remind us why this hasn't been done yet? Or where done?
    - gamblor956 13y ago
      Because then people who own the companies would simply keep the income in the company, and have the company pay as much of their expenses as possible as "business expenses." Essentially, they would get the benefits of the income without anyone actually paying taxes on it. The company would distribute the profits only when absolutely necessary. Note: this scenario has already been envisioned by tax advisers. Common solutions include either converting corporations to flow-through entities for income tax purposes, or levying penalty rates of income tax on undistributed profits.
      - was_hellbanned 13y ago
        That already happens. It's fraud, and we have enforcement against it.
  - omonra 13y ago
    How would this help Italian government? All income would flow up to the US and get eventually taxed there.
shmerl 13y ago
Looks like they hate free trade.
- walshemj 13y ago
  No just discriminate against non Italians as expats who work in the Italian Universities will testify.
belorn 13y ago
Whats the difference between their goal, and simply adding an duty tax on imported services?

39 points by snowbunny 13y ago

davidgerard 13y ago

The EU objection is pretty solid, sadly.

aristidb 13y ago
Why sadly?
alemhnan 13y ago
The objection reported in the article seems to me quite usual political boilerplate without real substance. One of the comments says something interesting: "Europe will have to address the fiscal treatment of multinationals, and by its nature, this is not a task to be faced on a piecemeal basis." That sounds more the real issue of the problem to me.

toyg 13y ago

Italy: always at the forefront of legislative innovation to kill the internet. Piratebay blocks? Check. Fighting encryption and anonimity? Check. Taxing the crap out of anything that moves? Check. Cutting investments in r&d and universities across thr board? Check. And then they wonder why their economy sucks.

tluyben2 13y ago
They are doing that in most EU countries, not only Italy or the PIGS. I would say the PIGS have a lot of reasons besides maybe this why they are going badly; simple things like being anti-client-friendly as much as possible and finding that normal.
- _delirium 13y ago
  I have a little experience in several EU countries, and if there's any correlation, it's generally in the other direction, with the higher-tax ones generally being better places to do business (I doubt this is a causal relationship, though). The issue with southern Europe is that the government is corrupt, slow, and non-transparent, and regulations are unpredictable and inconsistently enforced. For example, Denmark's taxes are about 1.5x Greece's (50% of GDP versus 35% of GDP, overall). But Denmark is generally a nicer and easier place to do business. The bureaucracy is large and expensive, but in return for all the money it costs, you get quick, non-corrupt, predictable service. You can register a company in literally hours (online!), for example, while it takes weeks in lower-tax Greece.
  - tluyben2 13y ago
    Well that last example shows some of the PIGS problems which actually do make it bad business places; the 'mañana‎' thing is deeply ingrained because (I think and hope), before, they didn't really have to care. Although it's been 40-60 years since that was true, it's very much real in all of them. Portugal is moving away from that faster than the others in my experience.
mino 13y ago
Regarding "piratebay blocks" and, more generically, DNS censorship: recently, RIPE published [1] usage estimations of 8.8.8.8 by country. It is estimated that 12% of Italian internet users has configured 8.8.8.8 on their machine, which I believe is an astonishing high number! I work at an Italian ISP and we ran some statistics ourselves and found that percentage to be around 5%, which is lower but still massive. If you consider that the average Internet user doesn't even know what "DNS" is... that means a considerable part of tech-savy users are not using their ISP's DNS (which breaks down many kind of things, among which CDNs). That's a direct consequence of Government-issued DNS censorship, which all Italian ISP need to obey. [1] https://labs.ripe.net/Members/gih/measuring-googles-public-dns https://labs.ripe.net/Members/gih/measuring-googles-public-d...
- belorn 13y ago
  > that means a considerable part of tech-savy users are not using their ISP's DNS (which breaks down many kind of things, among which CDNs). Is every CDN's depended on privileged position inside ISP's? DNS by design is on the edge of the network, and works perfectly fine regardless of who ask the server for a lookup. If the DNS server want to do geo-depended service, they only have to use geo-ip to figure out where a request is coming from and sending the closest geo-located server as answer. You can even do it with http server and redirects. ISP based dns resolver existed because early networks took time and money to send a single package back and forth from the client to the server. Those economics should not be considered in 2013. Having a third-party doing your dns resolving is like calling the local police office for directions when driving. Antiquated, unnecessary, and not very safe any more for privacy reasons.
  - waps 13y ago
    DNS requests do not specify who requests the IP address. So think of the problem a CDN has : it has to identify the requesting party's geographical location, based on where the request comes from. If it comes from 8.8.8.8 then you've got no clue. If it comes from an ISPs recursive DNS you can guess : most ISPs have limited geographical reach. If it comes from Telecom Italia's DNS servers, it's either Italy or the middle east (and due to seabone, you will feed them the same entry point to the CDN) When a request comes from Google (or for that matter, another global network like Level3) you have a problem. The request doesn't specify where the client is, and the request will be cached. So what do you do ? Which entrypoint do you feed it ? You're essentially stuck with anycast, and that has it's own problems.
jessedhillon 13y ago
This is a far too simplistic analysis of a multifaceted issue with no single answer. It's the kind of thing I'd expect to hear on Fox.
- olefoo 13y ago
  Yes. I believe it's an artefact of the popularity of the site that that type of comment is becoming more common. We've seen a noticeable increase in trolling and simplistic bias-driven comments over the past year (i.e. comments that suggest that the commenter cannot even conceive why someone might not share their viewpoint).
  - chronic25 13y ago
    No.
- toyg 13y ago
  It's not an analysis, it's a rant, sure. BUT as an Italian, I've seen this over and over and it sickens me. Italy is one of those very few countries where for years you couldn't legally run an open wifi spot - you had to file ID cards of each and every user, and send them to the police on request. Where the early cypherpunk scene was criminalised and associated with terrorism - the police would just sequester entire servers on a whim, just to collect SSH keys and mailing lists of activists. Where authorities cracked down hard on P2P while at the same time supporting a copyright regime that is much worse than the equivalent US one (the association of publishers and music labels is legally tasked of collecting royalties and copyright-related taxes, with no oversight whatsoever on where the money actually ends up). Where law-mandated DNS blocks were pioneered. All this in a country with corruption and organised crime at levels unseen elsewhere in Europe, an economy that's been stalling for almost 20 years now, a huge anti-business bureaucracy, and gigantic public debt. It's like, "don't you have anything more urgent to worry about, rather than bothering our Net with laws so inane, even the EU will likely strike them down?" If this sounds like something out of Fox, I invite you to watch any political talk-show on Italian TV. You think Fox is bad? HA! The problem at hand is not complicated, but it's something that 1) must be solved at the European level (otherwise, why did we create a unified market?), 2) does not touch real revenues being siphoned to tax havens, which are the real problem -- does Apple sell ads or internet services? not really, but they're THE prime example of this problem, and still won't be touched by this law. It's the usual buffoonery devised by one of the worst political and economic elites in the developed world.

Dylan16807 13y ago

Google, Starbucks Corp. (SBUX) and Amazon.com Inc. have been criticized for strategies that shift billions of dollars of profits offshore.[...] Google last year moved nearly $12 billion to the Bermuda unit, the majority of its worldwide income, cutting more than $2 billion off its global income tax bill. Google’s Italian unit last year reported total income taxes of just 1.8 million euros, corporate filings show. Google's tax-avoidance has nothing to do with this new law. It's true that Google shifts profits around to avoid paying taxes where they do their actual labor. But changing that wouldn't change the fact that Google isn't based in Italy. For the sake of simplicity let's say that Google stayed in Ireland when they stopped abusing the system. They would sell all their European ads from Ireland, and pay a hefty tax with no loopholes. And their tax payments in Italy... would not change. This law is strictly anti-outsourcing. It does nothing to stop Google's tax avoidance, and would still be just as 'needed' even if Google didn't avoid taxes. Bringing it up muddies the water and serves no purpose other than making Google look like a bad guy.

alemhnan 13y ago
Maybe I'm wrong, but with this law Google is not able to sell ads in Italy. So if they still want to do that they need to open an Italian company and therefore pay taxes in Italy. So, for Italy at least, things would change.
- Dylan16807 13y ago
  Right, but blocking sales to another country has absolutely nothing to do with how an entity in another country pays their taxes. Italy is objecting only to the fact that the ad-selling-Google is in another country, and trying to make them build a local version.
- tonfa 13y ago
  Depends, what is taxed in Italy: profit or revenue? An italian subsidiary would have to pay its mother company for the services it provides (which is everything, since no user would be serviced from Italy). So the Italian company could easily make 0 (or very few) profit.

anoncow 13y ago

I don't understand. If I want to use AdWords and if Google is still selling from Ireland,what do I do? Buying ads from Italianads.com is not going to make my ads appear on Google.

carlob 13y ago

The biggest problem with this law is not its effect on google: the way it's written now forbids any Italian internet user from visualizing ads that were not purchased from an Italian company, and this applies to all websites. So while Google might be forced to comply, most international websites won't, rendering them automatically illegal in Italy, which is probably unenforceable. While I agree with the spirit of making these large multinational companies pay their fair share of taxes I think this is a rather ham fisted attempt.

gioi 13y ago
Have you read the law? Do it. Rendering is not illegal, but if you're an Italian company you can buy online ads only from another Italian company.
- jamesaguilar 13y ago
  It puts Italian companies at a significant disadvantage in online advertising, which is fascinating. I wonder how many marginal companies will be incorporated outside Italy's borders because of this law. It will be fascinating to see the analysis come down in ten or fifteen years (assuming the law lasts that long).
- carlob 13y ago
  Pardon the italian 17-bis. Al decreto del Presidente della Repubblica 26 ottobre 1972, n. 633, dopo l'articolo 17 è inserito il seguente: «Art. 17-bis – 1. I soggetti passivi che intendano acquistare servizi on line sia mediante operazioni di commercio elettronico sia diretto che indiretto, anche attraverso centri media e operatori terzi, sono obbligati ad acquistarli da soggetti titolari di una partita IVA rilasciata dall'amministrazione finanziaria italiana. 2. Gli spazi pubblicitari on line e i link sponsorizzati che appaiono nelle pagine dei risultati dei motori di ricerca (servizi di search advertising), visualizzabili sul territorio italiano durante la visita di un sito internet o la fruizione di un servizio on line attraverso rete fissa o rete e dispositivi mobili, devono essere acquistati esclusivamente attraverso soggetti, quali editori, concessionarie pubblicitarie, motori di ricerca o altro operatore pubblicitario, titolari di partita IVA rilasciata dall'amministrazione finanziaria italiana. La presente disposizione si applica anche nel caso in cui l'operazione di compravendita sia stata effettuata mediante centri media, operatori terzi e soggetti inserzionisti. Says here that the law applies to results visible on Italian territory.

gioi 13y ago

I'm Italian. Here tax burden for artisans, small business, big companies is over 50%. What if we could shift part of the taxation from artisans to big multinationals? What's wrong with this idea?

Heliosmaster 13y ago
That it does not lower at all taxes on common people and normal jobs. Large corporations who have interests (and money to enforce it) will always find a way (at least political). This is the usual attempt from our politicians, who have no idea how a computer is turned on (no wait.. they play poker on their ipad while discussing laws), to regulat something they do not understand.
- gioi 13y ago
  I asked what's wrong with the idea, not with the implementation. I completely agree with the fact that this law should have been discussed at international level (at least EU+USA). I can realize from your words all your discouragement for the global ethical crisis. I really hope that future generations will be able to enforce this kind of measures. (BTW, may I ask you where are you from?)
yetanotherphd 13y ago
The problem is that you are erecting trade barriers in order to do this, by forcing ads to be sold in Italy. And the deeper problem is that every country would like to shift its tax burdens to "big multinationals" but there are tax and trade agreements to impose some fairness and order. If an advertising company really were running some of their operation from Italy, they should certainly pay tax there (and not, say, in Ireland). But you can't expect to tax all ads that are purchased by Italians that really are sold from overseas.
- vkou 13y ago
  Said tax and trade agreements don't impose fairness and order, as much as they tie every participating nation down in a race to the bottom. Any board of directors would be considered to be out of their minds if for the sake of a single, non-critical contract, they signed agreements that completely tied their hands in how their firm should run. On the other hand, when governments do it, they are heroes. Disclaimer: I'm a Canadian working for Google. And I have no opinion on this particular piece of legislature.

jotm 13y ago

How about making the country a better place to start a company instead? You know, so you can attract foreign capital and entrepreneurs, and also reduce the local brain drain. No wonder Italians run to Germany, UK and Ireland to start their companies. Also, good luck enforcing that law.

mortyseinfeld 13y ago
Because that takes too much strategic thinking for these spastic, greedy bureaucrats.
raverbashing 13y ago
You'll be surprised about the hassles to open an (Internet) company in Germany. They get the business mostly because they are cheap (and educated workforce, of course)
- jotm 13y ago
  I don't know from first hand experience, but I've been told that it's relatively easy to open a UG (their version to an LLC/UK LTD) company and start working right away. Hiring and managing employees seems to be the hardest part.
  - raverbashing 13y ago
    Yes, the issues are mainly in hiring, labour code, and also privacy and IP issues. Privacy is a big deal in Germany. (And of course, doing all that in German, but in Berlin it's easy to do things in English. But not everybody speaks English)

znowi 13y ago

Google became too greedy and this is the result of it. I, for one, in support of this law. You can't harvest billions of profit worldwide, then sneak it all through tax heavens and expect it to continue indefinitely. Someone will get weary of this practice. As a thought experiment, imagine the US reaction if Google was an Italian company - making loads of money in the US and paying 0 taxes :)

was_hellbanned 13y ago
The point becomes moot if you eliminate corporate income tax. You want companies to pay salaries, not taxes.
- ansgri 13y ago
  Good point. Could you please remind us why this hasn't been done yet? Or where done?
  - gamblor956 13y ago
    Because then people who own the companies would simply keep the income in the company, and have the company pay as much of their expenses as possible as "business expenses." Essentially, they would get the benefits of the income without anyone actually paying taxes on it. The company would distribute the profits only when absolutely necessary. Note: this scenario has already been envisioned by tax advisers. Common solutions include either converting corporations to flow-through entities for income tax purposes, or levying penalty rates of income tax on undistributed profits.
    - was_hellbanned 13y ago
      That already happens. It's fraud, and we have enforcement against it.
- omonra 13y ago
  How would this help Italian government? All income would flow up to the US and get eventually taxed there.

shmerl 13y ago

Looks like they hate free trade.

walshemj 13y ago
No just discriminate against non Italians as expats who work in the Italian Universities will testify.

belorn 13y ago

Whats the difference between their goal, and simply adding an duty tax on imported services?