5 ms·

Is there logic behind France’s rumored €1 Billion Google Tax?

23 points by liam_boogar 13y ago

Doublon 13y ago
The answer is "no". Disclaimer: I'm French.
- louhike 13y ago
  The fact that you are french does not make your opinion meaningfull without any explanation on why you disagree with this tax. Please, explain us why or do not leave this kind of comments.
  - vvvVVVvvv 13y ago
    Another French there, but with hopefully more insight on the why. If France alone stands up for this one, it's meaningless because they'll find a loop (or carry on with the Double Irish and Dutch sandwich) and we'll just look like communist heaven (hyperbole) while not reaping anything. We need to do it at the EU level, with a law which overrules local business taxations settings if the company is owned by a non EU entity. Of course, the only way to push for it is to have champion country doing the dirty work, so I guess we're stuck with that.
mercurial 13y ago
The article is not replete on details on how this supposed tax would work. Personally, I'm in favour of taxing Internet companies, but I believe tackling such a complex issue affecting many countries on a national level is a mistake. Disclaimer: I'm French too.
- sillysaurus2 13y ago
  Personally, I'm in favour of taxing Internet companies Why? EDIT: I was just curious to hear more.
  - liam_boogar 13y ago
    Why you saying Why should Internet companies be taxed? Or Why should taxes exist at all?
    - exDM69 13y ago
      > Why you saying Why should Internet companies be taxed? Because all other companies are being taxed when offering products or services to citizens of the given country, within the legislation of that country. Certain Internet companies use questionable tax planning strategies (in Europe as well as the US) to pay a ridiculously small amount of taxes and thus gaining an unfair advantage. > Or Why should taxes exist at all? Because running a country costs money which is required to provide services such as law enforcement and a regulated banking system. These services are required by citizens and corporations alike. But going further down this argument is obviously not in the scope of this discussion thread and will not end up being a fruitful conversation. We're talking about a small-ish change to the tax system rather than a full blown anarchist revolution here.
  - mercurial 13y ago
    Why shouldn't they pay their fair share? Normal companies who make profits get taxed. Giant companies funnel their profits through Holland and Ireland, and pay a paltry amount. Back in the days, the nobility had also exempted itself from taxes. I see no reason for this state of affairs to continue.
    - davidw 13y ago
      So the solution is for .nl and .ie to close their loopholes, not create new taxes, no? They recently passed a similar tax in Italy, and the whole thing was about how the big bad American companies are making money and not investing in Italy. This, at the same time Fiat is decamping from Italy because the business climate is so shitty. So what's their creative answer to improve things? Another tax!
      - nl 13y ago
- seszett 13y ago
  > I believe tackling such a complex issue affecting many countries on a national level is a mistake. This sounds like the main problem here, to me: EU law makes it easy for a company to do business anywhere in EU and only pay taxes in its headquarters, on the assumption that it doesn't matter a lot where the company pays its taxes as long as it's inside the EU. But at the same time, EU law doesn't regulate corporate tax, so some countries can easily take advantage of that by lowering them (or completely removing them) so companies will be attracted there. They are basically living as parasites to the other countries, and the only solution to that seems to be harmonizing taxes accross the EU. Edit: could you explain the downvote a bit? I'm curious to hear what you don't like in what I said.
  - davidw 13y ago
    > so some countries can easily take advantage of that by lowering them (or completely removing them) so companies will be attracted there. God forbid anyone try and make a country a good place to do business. I'm for closing the various loopholes, because big companies should have to pay the same taxes that smaller companies do. But I am also very much in favor or countries trying to compete and improve in order to attract business. > Edit: could you explain the downvote a bit? I'm curious to hear what you don't like in what I said. You call other countries who don't want to import the crappy, unfriendly business climate of countries like France or Italy (where I live) "parasites".
    - seszett 13y ago
      > You call other countries who don't want to import the crappy, unfriendly business climate of countries like France or Italy (where I live) "parasites". You are taking this the wrong way. It's not that Ireland does not want to import corporate tax from France and Italy, it is that they substantially lowered it, expressly to take advantage of the other EU countries. You can also see that I didn't advocate higher taxes for Ireland or lower taxes for the rest of EU, since it doesn't actually matter as long as they are the same in all EU.
      - davidw 13y ago
- liam_boogar 13y ago
  The rumor is not replete with how the proposed tax would work either; however, previous indications of similarly proposed taxes would suggest a tiered tax level based on different types of User data (more sensitive vs less sensitive) are stored in different tiers (France/National, Europe/Federal, and outside of Europe), with wavering amounts of taxes on a, I imagine, per user level.
- touristtam 13y ago
  We (European) need to have a unified taxation system for this kind of business. Nationalizing a tax on internet companies sounds like a lots of headache trying to figure out who own what to whom. Either this or a tax on internet (financial) transaction; something like 1-1,5% of the amount transferred.
Shivetya 13y ago
I had to kind of laugh at the seeming distress expressed in the article the Google merely passed on the taxes to the consumer, as in who do politicians and journalist think pay all taxes? Business taxes are merely an indirect means of taxation on the populace, it is done to fool the general population into believing someone else carries the load.
- adaml_623 13y ago
  Yes and no. The services that Google provides are already priced at the supply/demand meeting point. Tax is merely reducing profits that are already made. Google is not going to insist on making X% net profit and will not put up it's rates just because a tax rate changes. You can't pretend that Google dropped their rates in the UK by a few percent when the corporate tax rates dropped last year?
  - waps 13y ago
    You neglect that a new supply-demand equilibrium will form, and since taxes effectively reduce supply, it will form at a higher price, with less demand. End result : less sales, customers paying more, and Google earning less. I do think you should consider that this will only raise prices for advertisers in France though. So it will be even easier for out-of-country advertisers to undercut France's local suppliers. The problem is that most citizens don't realize just how big the state's take on a normal wage is. You believe it's ~55% of your income. Well, no. In France, a business has to pay taxes to pay you, then you pay taxes on what you get (to make matters more complicated, these taxes are collected by your employer). In reality your bruto pay is about 130% of what you get quoted (just due to taxes). Out of that 45% remains (taxed at 55%). Then you have local taxes, since you have to live somewhere, these are at least 2% of income. And you add VAT 20% on most things you actually buy. This ignores various other things, like the fact that keeping track of all this requires people, and obviously the state doesn't pay for those, so they yet again increase costs for businesses. But let's calculate. Out of what your employer pays you in France, you get to spend ... 100% * (100/130) * 45% * 80% = 27,6%. So the tax rate in France is 72.4%, for a person having a decent job in IT. We're not talking bank director here. And of course the French state is raising these levels. Also these are MINIMUM levels (for a decent wage), it's assuming you aren't investing in stock, assuming you don't own a house (or God forbid - more than one house), you don't own a car, ... If any of those are not true, you'll be paying even more. I think it's beyond obvious that this tax level, even if it weren't going up, is not sustainable.
pms 13y ago
Maybe this kind of taxation could be a way of coping with NSA surveillance of European citizens? (That's just a provocative sentence, so please keep on reading.) Currently, Europe is at data disadvantage comparing with USA, and this disadvantage is used by USA not only for security reasons, but also to protect interests of USA. (That's what Snowden claims himself.) In such case, shouldn't Europe also protect its interests? I think the only two ways out are: 1. Imposing taxation on foreign Internet giants in Europe. Needless to say, that would lead to divisions of the Internet, which we all want to avoid. 2. There should be an international act signed between Europe and USA providing Internet companies certain degree of independence from national-level surveillance, which would protect privacy of citizens of each country involved in the act to the same extent.
- lispm 13y ago
  Most of these US companies are huge tax avoiders. They use very trick to avoid paying ANY taxes. For some reasons these companies have tricked the countries to be able to. About time they get taxed at all.
lepouet 13y ago
The problem for Google which might cost them 1 Billion is that they say that all sales to french customers are done in Ireland but in the same time Google has 100+ employees in france whith title like "sales manager" who talks about theirs "clients" in internal emails.
- liam_boogar 13y ago
  I don't think that is true.
  - lepouet 13y ago
    This is what this article http://www.bfmtv.com/economie/enquete-google-france-sorganise-echapper-fisc-703022.html http://www.bfmtv.com/economie/enquete-google-france-sorganis... ( in french ) explain. Realising this was a mistake everything was renamed in 2011, apparently.
atmosx 13y ago
The article is kinda poor, but the subject is interesting. Once again technology is way ahead of the justice estates all over the world (for good or bad). Google and Apple (among others) are renown in Europe for paying virtually no taxation[1]. And while once upon a time no one really cared, now it's hard to swallow for voters being crashed by the financial crisis, so either this will change or some political figures might lose additional points in the next elections. I'm not angry with Google. I'm angry with our corrupted politicians who've done nothing to fix this, all over Europe, not just in France and not just for Google. Since we have the technology to tackle the issue at hand, everything else sound like an excuse. [1] http://www.dailymail.co.uk/news/article-2549379/Fresh-questions-raised-Googles-tax-avoidance-tech-giant-announces-profits-3-4-billion.html http://www.dailymail.co.uk/news/article-2549379/Fresh-questi...
- deleted 13y ago
  [deleted]
digitalengineer 13y ago
"For now, the tax is just a rumor, A rumor that is a symptom of a very real problem. And that problem is Taxation on Internet Companies. Expect this problem to be solved in the next 10 years." A very real problem indeed. But it's not a Google problem. It's a France/Hollande problem. France is in recession (agian or still). French private sector contracts as Germany’s grows Business activity in the eurozone’s two largest economies is diverging sharply, with France’s private sector contracting after two months of growth while in Germany it accelerated to a 10-month high, according to a survey. http://www.ft.com/cms/s/0/87e4a572-5285-11e3-8586-00144feabdc0.html http://www.ft.com/cms/s/0/87e4a572-5285-11e3-8586-00144feabd... French officials warn of social tinderbox as economy contracts again The latest data show a continued erosion of France’s industrial base and export share. It risks shattering the credibility of President François Hollande, who has been talking up recovery for months. http://www.telegraph.co.uk/finance/financialcrisis/10450889/French-officials-warn-of-social-tinderbox-as-economy-contracts-again.html http://www.telegraph.co.uk/finance/financialcrisis/10450889/...
- tgautier 13y ago
  Find another article to comment on with your fucking french bashing. This article is about International Companies avoiding taxation in Europe, which is, believe it or not, a real problem in terms of finance and ethics. They make money out of EU citizens and get out of it with 0% taxes when EU business have to pay between 15% and 35% of their benefits in tax.
  - digitalengineer 13y ago
    Thank you for your kind words. Were you a waiter from Paris by any change? I read the article is about France’s rumored €1 Billion Google Tax. Not a European Tax...
    - tgautier 13y ago
      I thought this article was more about the fact that "some" non EU companies are making huge loads of money and evade tax. I'm not a fan of this french government but I have to admit that it's not an heretic idea to say that a company should be taxed on its revenue. Sorry for the tone but I'm so used to the comparison with Germany by people who seem to forget that the Euro is tailored for countries with an strong export oriented economy, like Germany. Euro is more the core problem than France/Hollande or the fake North vs South Europe fight.

23 points by liam_boogar 13y ago

Doublon 13y ago

The answer is "no". Disclaimer: I'm French.

louhike 13y ago
The fact that you are french does not make your opinion meaningfull without any explanation on why you disagree with this tax. Please, explain us why or do not leave this kind of comments.
- vvvVVVvvv 13y ago
  Another French there, but with hopefully more insight on the why. If France alone stands up for this one, it's meaningless because they'll find a loop (or carry on with the Double Irish and Dutch sandwich) and we'll just look like communist heaven (hyperbole) while not reaping anything. We need to do it at the EU level, with a law which overrules local business taxations settings if the company is owned by a non EU entity. Of course, the only way to push for it is to have champion country doing the dirty work, so I guess we're stuck with that.

mercurial 13y ago

The article is not replete on details on how this supposed tax would work. Personally, I'm in favour of taxing Internet companies, but I believe tackling such a complex issue affecting many countries on a national level is a mistake. Disclaimer: I'm French too.

sillysaurus2 13y ago
Personally, I'm in favour of taxing Internet companies Why? EDIT: I was just curious to hear more.
- liam_boogar 13y ago
  Why you saying Why should Internet companies be taxed? Or Why should taxes exist at all?
  - exDM69 13y ago
    > Why you saying Why should Internet companies be taxed? Because all other companies are being taxed when offering products or services to citizens of the given country, within the legislation of that country. Certain Internet companies use questionable tax planning strategies (in Europe as well as the US) to pay a ridiculously small amount of taxes and thus gaining an unfair advantage. > Or Why should taxes exist at all? Because running a country costs money which is required to provide services such as law enforcement and a regulated banking system. These services are required by citizens and corporations alike. But going further down this argument is obviously not in the scope of this discussion thread and will not end up being a fruitful conversation. We're talking about a small-ish change to the tax system rather than a full blown anarchist revolution here.
- mercurial 13y ago
  Why shouldn't they pay their fair share? Normal companies who make profits get taxed. Giant companies funnel their profits through Holland and Ireland, and pay a paltry amount. Back in the days, the nobility had also exempted itself from taxes. I see no reason for this state of affairs to continue.
  - davidw 13y ago
    So the solution is for .nl and .ie to close their loopholes, not create new taxes, no? They recently passed a similar tax in Italy, and the whole thing was about how the big bad American companies are making money and not investing in Italy. This, at the same time Fiat is decamping from Italy because the business climate is so shitty. So what's their creative answer to improve things? Another tax!
    - nl 13y ago
seszett 13y ago
> I believe tackling such a complex issue affecting many countries on a national level is a mistake. This sounds like the main problem here, to me: EU law makes it easy for a company to do business anywhere in EU and only pay taxes in its headquarters, on the assumption that it doesn't matter a lot where the company pays its taxes as long as it's inside the EU. But at the same time, EU law doesn't regulate corporate tax, so some countries can easily take advantage of that by lowering them (or completely removing them) so companies will be attracted there. They are basically living as parasites to the other countries, and the only solution to that seems to be harmonizing taxes accross the EU. Edit: could you explain the downvote a bit? I'm curious to hear what you don't like in what I said.
- davidw 13y ago
  > so some countries can easily take advantage of that by lowering them (or completely removing them) so companies will be attracted there. God forbid anyone try and make a country a good place to do business. I'm for closing the various loopholes, because big companies should have to pay the same taxes that smaller companies do. But I am also very much in favor or countries trying to compete and improve in order to attract business. > Edit: could you explain the downvote a bit? I'm curious to hear what you don't like in what I said. You call other countries who don't want to import the crappy, unfriendly business climate of countries like France or Italy (where I live) "parasites".
  - seszett 13y ago
    > You call other countries who don't want to import the crappy, unfriendly business climate of countries like France or Italy (where I live) "parasites". You are taking this the wrong way. It's not that Ireland does not want to import corporate tax from France and Italy, it is that they substantially lowered it, expressly to take advantage of the other EU countries. You can also see that I didn't advocate higher taxes for Ireland or lower taxes for the rest of EU, since it doesn't actually matter as long as they are the same in all EU.
    - davidw 13y ago
liam_boogar 13y ago
The rumor is not replete with how the proposed tax would work either; however, previous indications of similarly proposed taxes would suggest a tiered tax level based on different types of User data (more sensitive vs less sensitive) are stored in different tiers (France/National, Europe/Federal, and outside of Europe), with wavering amounts of taxes on a, I imagine, per user level.
touristtam 13y ago
We (European) need to have a unified taxation system for this kind of business. Nationalizing a tax on internet companies sounds like a lots of headache trying to figure out who own what to whom. Either this or a tax on internet (financial) transaction; something like 1-1,5% of the amount transferred.

Shivetya 13y ago

I had to kind of laugh at the seeming distress expressed in the article the Google merely passed on the taxes to the consumer, as in who do politicians and journalist think pay all taxes? Business taxes are merely an indirect means of taxation on the populace, it is done to fool the general population into believing someone else carries the load.

adaml_623 13y ago
Yes and no. The services that Google provides are already priced at the supply/demand meeting point. Tax is merely reducing profits that are already made. Google is not going to insist on making X% net profit and will not put up it's rates just because a tax rate changes. You can't pretend that Google dropped their rates in the UK by a few percent when the corporate tax rates dropped last year?
- waps 13y ago
  You neglect that a new supply-demand equilibrium will form, and since taxes effectively reduce supply, it will form at a higher price, with less demand. End result : less sales, customers paying more, and Google earning less. I do think you should consider that this will only raise prices for advertisers in France though. So it will be even easier for out-of-country advertisers to undercut France's local suppliers. The problem is that most citizens don't realize just how big the state's take on a normal wage is. You believe it's ~55% of your income. Well, no. In France, a business has to pay taxes to pay you, then you pay taxes on what you get (to make matters more complicated, these taxes are collected by your employer). In reality your bruto pay is about 130% of what you get quoted (just due to taxes). Out of that 45% remains (taxed at 55%). Then you have local taxes, since you have to live somewhere, these are at least 2% of income. And you add VAT 20% on most things you actually buy. This ignores various other things, like the fact that keeping track of all this requires people, and obviously the state doesn't pay for those, so they yet again increase costs for businesses. But let's calculate. Out of what your employer pays you in France, you get to spend ... 100% * (100/130) * 45% * 80% = 27,6%. So the tax rate in France is 72.4%, for a person having a decent job in IT. We're not talking bank director here. And of course the French state is raising these levels. Also these are MINIMUM levels (for a decent wage), it's assuming you aren't investing in stock, assuming you don't own a house (or God forbid - more than one house), you don't own a car, ... If any of those are not true, you'll be paying even more. I think it's beyond obvious that this tax level, even if it weren't going up, is not sustainable.

pms 13y ago

Maybe this kind of taxation could be a way of coping with NSA surveillance of European citizens? (That's just a provocative sentence, so please keep on reading.) Currently, Europe is at data disadvantage comparing with USA, and this disadvantage is used by USA not only for security reasons, but also to protect interests of USA. (That's what Snowden claims himself.) In such case, shouldn't Europe also protect its interests? I think the only two ways out are: 1. Imposing taxation on foreign Internet giants in Europe. Needless to say, that would lead to divisions of the Internet, which we all want to avoid. 2. There should be an international act signed between Europe and USA providing Internet companies certain degree of independence from national-level surveillance, which would protect privacy of citizens of each country involved in the act to the same extent.

lispm 13y ago
Most of these US companies are huge tax avoiders. They use very trick to avoid paying ANY taxes. For some reasons these companies have tricked the countries to be able to. About time they get taxed at all.

lepouet 13y ago

The problem for Google which might cost them 1 Billion is that they say that all sales to french customers are done in Ireland but in the same time Google has 100+ employees in france whith title like "sales manager" who talks about theirs "clients" in internal emails.

liam_boogar 13y ago
I don't think that is true.
- lepouet 13y ago
  This is what this article http://www.bfmtv.com/economie/enquete-google-france-sorganise-echapper-fisc-703022.html http://www.bfmtv.com/economie/enquete-google-france-sorganis... ( in french ) explain. Realising this was a mistake everything was renamed in 2011, apparently.

atmosx 13y ago

The article is kinda poor, but the subject is interesting. Once again technology is way ahead of the justice estates all over the world (for good or bad). Google and Apple (among others) are renown in Europe for paying virtually no taxation[1]. And while once upon a time no one really cared, now it's hard to swallow for voters being crashed by the financial crisis, so either this will change or some political figures might lose additional points in the next elections. I'm not angry with Google. I'm angry with our corrupted politicians who've done nothing to fix this, all over Europe, not just in France and not just for Google. Since we have the technology to tackle the issue at hand, everything else sound like an excuse. [1] http://www.dailymail.co.uk/news/article-2549379/Fresh-questions-raised-Googles-tax-avoidance-tech-giant-announces-profits-3-4-billion.html http://www.dailymail.co.uk/news/article-2549379/Fresh-questi...

deleted 13y ago
[deleted]

digitalengineer 13y ago

"For now, the tax is just a rumor, A rumor that is a symptom of a very real problem. And that problem is Taxation on Internet Companies. Expect this problem to be solved in the next 10 years." A very real problem indeed. But it's not a Google problem. It's a France/Hollande problem. France is in recession (agian or still). French private sector contracts as Germany’s grows Business activity in the eurozone’s two largest economies is diverging sharply, with France’s private sector contracting after two months of growth while in Germany it accelerated to a 10-month high, according to a survey. http://www.ft.com/cms/s/0/87e4a572-5285-11e3-8586-00144feabdc0.html http://www.ft.com/cms/s/0/87e4a572-5285-11e3-8586-00144feabd... French officials warn of social tinderbox as economy contracts again The latest data show a continued erosion of France’s industrial base and export share. It risks shattering the credibility of President François Hollande, who has been talking up recovery for months. http://www.telegraph.co.uk/finance/financialcrisis/10450889/French-officials-warn-of-social-tinderbox-as-economy-contracts-again.html http://www.telegraph.co.uk/finance/financialcrisis/10450889/...

tgautier 13y ago
Find another article to comment on with your fucking french bashing. This article is about International Companies avoiding taxation in Europe, which is, believe it or not, a real problem in terms of finance and ethics. They make money out of EU citizens and get out of it with 0% taxes when EU business have to pay between 15% and 35% of their benefits in tax.
- digitalengineer 13y ago
  Thank you for your kind words. Were you a waiter from Paris by any change? I read the article is about France’s rumored €1 Billion Google Tax. Not a European Tax...
  - tgautier 13y ago
    I thought this article was more about the fact that "some" non EU companies are making huge loads of money and evade tax. I'm not a fan of this french government but I have to admit that it's not an heretic idea to say that a company should be taxed on its revenue. Sorry for the tone but I'm so used to the comparison with Germany by people who seem to forget that the Euro is tailored for countries with an strong export oriented economy, like Germany. Euro is more the core problem than France/Hollande or the fake North vs South Europe fight.