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It's about time that something is done about taxation. It can't be that US companies earn billions of dollars in EU nations but pay almost no tax (either in the

by ulfw 12y ago

It's about time that something is done about taxation. It can't be that US companies earn billions of dollars in EU nations but pay almost no tax (either in the EU or the US). As a simple employee I cannot evade taxes (and might have to pay double taxes in the EU and US if I am a US citizen/perm resident working in the EU), yet large corporations can.

kghose 12y ago
See how easily the politicos make it about you against me, when we should be working together. Dude, if you are European, and you make good software, I'll use it. In fact, I use a ton of software made by people who, by chance, were born in Europe. But the moment you start to rail against 'US companies' (I work in a US company) I begin to think, waitaminuite, that guy is against me - he wants to hurt me, maybe I shouldn't use his stuff either ...
- yulaow 12y ago
  I don't think it is about asking to "not use something". It is about asking to pay taxes where you gain money. To have a equal system any vendor should pay in a specific state the part of taxes related to what he sold in that specific state. It is really incredible that if I sell the 99.99% of my product out of Luxembourg I pay all taxes only in Luxembourg, for example. (edit obviously using the various holes in the EU law system)
- danmaz74 12y ago
  What is actually absurd is that those companies don't pay those taxes in the US either, because they can keep the money in fiscal havens for ages...
  - mike_hearn 12y ago
    No. You read about money sitting in the Caribbean because the US tax system is broken and tries to tax money made anywhere in the world (this makes no sense, and no other country does this). BUT .... that doesn't mean they avoid the US taxes! For Google the money ends up sitting in Bermuda: not a place noted for its abundance of cheap colo space or computer scientists. Obviously it isn't going to stay there because there's nothing to spend it on. Instead the money sits offshore until something more useful is found. What US companies want to happen is that the US Govt puts in place a "tax holiday" in which they temporarily stop being idiots and use the same tax rules as the rest of the world, thus allowing those companies to move the money earned abroad back into the USA without it being taxed twice (once by the country where it was earned and once by Uncle Sam). This has happened before so they think maybe it'll happen again. Then they can spend it on building fancy offices and hiring splurges, all of which yields taxable income inside the USA. What actually tends to happen is that politicians, even the ones that acknowledge the sense of this, don't like being seen to give big companies a tax break. So they prevaricate and eventually the money gets spent abroad in places like Europe or Asia, where double taxation treaties work properly. At that point the money gets taxed via payroll taxes, employee income taxes, VAT etc. Own goal for America. Still ... the money doesn't sit there because they want to avoid US taxes. They generally want to avoid double taxation, and then spend the money saved inside the USA.
    - danmaz74 12y ago
      What double taxation? They are NOT taxed in Europe, that's the whole point!!
      - mike_hearn 12y ago
        They are indeed taxed in Europe! The rate paid is low (until the money moves back around) but tax is paid.
        danmaz74 12y ago
        It's not a low rate. It's an accounting trick, which moves almost all the taxable profits to a fiscal haven, and this is possible exactly because there is NO double taxation.
venomsnake 12y ago
What i would do is system of minimum taxation. Like - all money made in Germany will be taxed at 20% and you pay your taxes with priority where you are incorporated. So if in Luxemburg the taxation is 5% - you pay 5% to luxemburg but cough the rest 15% to germany on the profits made in germany.
- mahyarm 12y ago
  That is pretty standard already. You usually get tax credits for foreign paid tax. The key is do they have the jurisdiction to tax you in the first place? If you only have a factory & employees in Luxemburg and just exported your product to the rest of the EU, is it really fair to tax you at Scandinavian tax rates for example?
  - DanBC 12y ago
    Personally I would see the company you describe as being a Luxemburg company, and subject to their tax rates. But when you have English customers buying product in English shops from your English staff in your English branches - well, that sounds like an English business. To then have a Luxemburg company that sells very expensive coffee beans to those English coffee shops, thus making those shops operate at a loss but making the coffee roasting Luxemburg business very wealthy - that's just a scam and it needs to be shut down. How to shut it down when you're coordinating the tax raising laws of many different countries is going to take some time.
    - mike_hearn 12y ago
      But that's arbitrary. If the Luxembourg company opens up a sales office in Sweden, but it has only 4 employees and there are 500 in Luxembourg, does that suddenly mean all those companies sales to Sweden get taxed twice? If so why would they ever open up an office there? Why not just insist customers fly to Luxembourg and visit their office instead? Governments are whipping up a mob over this issue and aren't thinking it through. Does Google really need an office in London? No. One exists there because, in the absence of other factors, it makes sense to hire internationally so you can access good employees who might not want to live in America (or vice versa). But if the first Google employee who started work in the UK suddenly meant ALL money coming from UK based customers got taxed twice, that first employee would never make financial sense. Companies just wouldn't do it. They'd insist the employees moved to them instead of them moving to the employees. This outcome makes no sense, but in their desperate quest to squeeze ever more blood out of the stone, maybe that's where governments are going to take us ...

by ulfw 12y ago

kghose 12y ago

See how easily the politicos make it about you against me, when we should be working together. Dude, if you are European, and you make good software, I'll use it. In fact, I use a ton of software made by people who, by chance, were born in Europe. But the moment you start to rail against 'US companies' (I work in a US company) I begin to think, waitaminuite, that guy is against me - he wants to hurt me, maybe I shouldn't use his stuff either ...

yulaow 12y ago
I don't think it is about asking to "not use something". It is about asking to pay taxes where you gain money. To have a equal system any vendor should pay in a specific state the part of taxes related to what he sold in that specific state. It is really incredible that if I sell the 99.99% of my product out of Luxembourg I pay all taxes only in Luxembourg, for example. (edit obviously using the various holes in the EU law system)
danmaz74 12y ago
What is actually absurd is that those companies don't pay those taxes in the US either, because they can keep the money in fiscal havens for ages...
- mike_hearn 12y ago
  No. You read about money sitting in the Caribbean because the US tax system is broken and tries to tax money made anywhere in the world (this makes no sense, and no other country does this). BUT .... that doesn't mean they avoid the US taxes! For Google the money ends up sitting in Bermuda: not a place noted for its abundance of cheap colo space or computer scientists. Obviously it isn't going to stay there because there's nothing to spend it on. Instead the money sits offshore until something more useful is found. What US companies want to happen is that the US Govt puts in place a "tax holiday" in which they temporarily stop being idiots and use the same tax rules as the rest of the world, thus allowing those companies to move the money earned abroad back into the USA without it being taxed twice (once by the country where it was earned and once by Uncle Sam). This has happened before so they think maybe it'll happen again. Then they can spend it on building fancy offices and hiring splurges, all of which yields taxable income inside the USA. What actually tends to happen is that politicians, even the ones that acknowledge the sense of this, don't like being seen to give big companies a tax break. So they prevaricate and eventually the money gets spent abroad in places like Europe or Asia, where double taxation treaties work properly. At that point the money gets taxed via payroll taxes, employee income taxes, VAT etc. Own goal for America. Still ... the money doesn't sit there because they want to avoid US taxes. They generally want to avoid double taxation, and then spend the money saved inside the USA.
  - danmaz74 12y ago
    What double taxation? They are NOT taxed in Europe, that's the whole point!!
    - mike_hearn 12y ago
      They are indeed taxed in Europe! The rate paid is low (until the money moves back around) but tax is paid.
      - danmaz74 12y ago
        It's not a low rate. It's an accounting trick, which moves almost all the taxable profits to a fiscal haven, and this is possible exactly because there is NO double taxation.

venomsnake 12y ago

What i would do is system of minimum taxation. Like - all money made in Germany will be taxed at 20% and you pay your taxes with priority where you are incorporated. So if in Luxemburg the taxation is 5% - you pay 5% to luxemburg but cough the rest 15% to germany on the profits made in germany.

mahyarm 12y ago
That is pretty standard already. You usually get tax credits for foreign paid tax. The key is do they have the jurisdiction to tax you in the first place? If you only have a factory & employees in Luxemburg and just exported your product to the rest of the EU, is it really fair to tax you at Scandinavian tax rates for example?
- DanBC 12y ago
  Personally I would see the company you describe as being a Luxemburg company, and subject to their tax rates. But when you have English customers buying product in English shops from your English staff in your English branches - well, that sounds like an English business. To then have a Luxemburg company that sells very expensive coffee beans to those English coffee shops, thus making those shops operate at a loss but making the coffee roasting Luxemburg business very wealthy - that's just a scam and it needs to be shut down. How to shut it down when you're coordinating the tax raising laws of many different countries is going to take some time.
  - mike_hearn 12y ago
    But that's arbitrary. If the Luxembourg company opens up a sales office in Sweden, but it has only 4 employees and there are 500 in Luxembourg, does that suddenly mean all those companies sales to Sweden get taxed twice? If so why would they ever open up an office there? Why not just insist customers fly to Luxembourg and visit their office instead? Governments are whipping up a mob over this issue and aren't thinking it through. Does Google really need an office in London? No. One exists there because, in the absence of other factors, it makes sense to hire internationally so you can access good employees who might not want to live in America (or vice versa). But if the first Google employee who started work in the UK suddenly meant ALL money coming from UK based customers got taxed twice, that first employee would never make financial sense. Companies just wouldn't do it. They'd insist the employees moved to them instead of them moving to the employees. This outcome makes no sense, but in their desperate quest to squeeze ever more blood out of the stone, maybe that's where governments are going to take us ...