Google's tax returns are trop petite says Hollande

France has had enough of the tax shenanigans of American Internet giants, and President Francois Hollande is going to … talk to Barack Obama about the issue. Well, it's a start of sorts: specifically, Hollande says he's going to ask the US to get moving on tax law harmonisation, to deal with the notorious practise of making …

[Anonymous Coward]

Perhaps our governments could take a leaf out of the Netherlands and figure out how they manage to do with just 15%.

Problem solved.

The solution to living beyond your means is not getting more credit cards or a bigger overdraft. It is to stop spending so much f**kin' money.

[ratfox]

obviously

Netherlands manages with low taxes by taxing the many rich companies that are attracted by its low tax rate. If everybody had such low rates, Netherlands would not be competitive any more, and wouldn't manage.

Nevertheless, the reason Google does not pay much taxes in France is not related to licensing deals. The reason is that Google France does not do much business in France. It is Google Ireland which does a lot of business in France, and has no reason whatsoever to pay taxes in France, since it is an Irish company.

If Europe does not want to abolish the rules which make it possible to earn money in the whole continent and pay income taxes in a single country, they should consider having country to country payments to cover transborder earnings. Thus, companies still pay taxes in a single country, France gets some money from Ireland, and countries like Ireland and Netherlands have less incentive to undercut other countries on income taxes.

[Schultz]

Leafy statements from the Netherlands

According to somewhat reliable sources (Wikipedia),the Netherland demands "20.0% for the first € 275,000 and above that a corporate tax rate of 25.5%" How again do they get by on a 15% corporate tax rate?

And with the double-Dutch-Irish Sandwich, the Netherlands allow foreign companies to get an effective tax rate of 0% on large parts of their income. Try to finance a government with that!

There is a major problem in the realm of taxation, namely that big business pays their lawyers much better than governments do and those high-payed lawyers seem to be worth their money.

[Anonymous Coward]

Duuuur

Because the countries that have the lowest rates get all the tax money the others get sod all.

But if you lower you tax rate it becomes a race to the bottom until there is no tax.

[codejunky]

@AC

"But if you lower you tax rate it becomes a race to the bottom until there is no tax."

Which is surely the better outcome? Looking at the maximum ends of this scale either the people have all the money which they use for what they need, or the gov has all the money and we all die in some socialist utopia (probably 5 days later starving).

We accept an amount of taxation to help support those who cant survive without. This is good taxation as it looks after as many as possible without using tax as a weapon. However when we are insanely taxed so badly that it makes a lot of people poor then it is bad taxation. You can tell when people are made poor because they are on benefits (long term benefits or even working yet still on benefits). Yet we tax everyone including the poor. This is a bad system which is unsustainable.

Aiming to take the least amount of money from the people should be the goal. Along with helping people through hard times. This does not include a surveillance state, public sector bloat, contractors of contractors to organise a desk, ID cards, many many managers, duck houses or any other creaming of the public funds.

What irritates me is the witch hunt for businesses and people who earn money, legally pay their required tax and yet are expected to pay loads more just so the people dont have to. Maybe thinking outside the box it makes more sense for govs to stop spending what they dont have on the promise of our future generations.

[Anonymous Coward]

Re: @AC

Aiming to take the least amount of money from the people should be the goal. Along with helping people through hard times. This does not include a surveillance state, public sector bloat, contractors of contractors to organise a desk, ID cards, many many managers, duck houses or any other creaming of the public funds.

Well, now you know why I watched a certain former government with open amazement. It was rather shocking to see how a club busy with blatant ripping off the nation's finances was kept in place by sheer good marketing, but then again, there are still people who believe the whole "do no evil" line from Google too.

What irritates me is the witch hunt for businesses and people who earn money, legally pay their required tax and yet are expected to pay loads more just so the people dont have to. Maybe thinking outside the box it makes more sense for govs to stop spending what they dont have on the promise of our future generations.

1 - Envy is an easy to abuse emotion to garner votes (although I must caveat that by observing that some of those high earners very seriously NOT deserved it, bank bonuses being a prime example).

2 - if the decision maker benefits personally from a planned government spend it would be nice if someone would actually highlight that. You mentioned duck houses - any idea how much profit a war generates?

[william 10]

Corporation TAX is a TAX on profits not turnover !

If you want to TAX based on turnover then the best one is VAT (with a few fixes). For companies like Google Corporation TAX is not the correct TAX to be looking its VAT. We should be charging VAT on the products & services in the country the products & services are delivered, and if this was done fairly then Google would in the France as it should in England pay 20% of it's turnover in TAX in each of the countries it operates.

[Anonymous Coward]

"If you want to TAX based on turnover then the best one is VAT"

william 10, how many times does it take before reality sinks in to thick skulls?

VAT is a tax on consumers, companies DO NOT PAY VAT, they COLLECT VAT from consumers and pass it back to Govt.

Companies buy materials/goods/services and pay VAT, but, they then claim that back from Govt.

Companies ADD VAT to goods/serivices they sell to consumers and then pass that back to Govt.

Got it?

[Chris Miller]

No wonder you're AC - I'd be too if I was as ignorant as you. Companies pay VAT on the Value Added (the clue is in the name). Of course, at the end of the day, consumers end up paying more - but that is equally true of any tax levied on companies - they either increase costs to their customers or reduce prices paid to their suppliers (which, ultimately, are employees, who are the same people as the ultimate consumers) or reduce profits paid to shareholders (which ultimately is the public again, in the form of investments, pensions etc.).

There is no magic money tree - how many times does it take before reality sinks in to thick skulls?

[Andrew Stubbs]

Optional

Oh go on I'll bite - my inner pedant can't stop me.

Consumers pay VAT; (VAT registered) companies merely collect that for HMRC. It's not a tax on companies at all and "value", added or otherwise, has nothing to do with VAT in the way you seem to think. You're also wrong about shareholders like pension funds being "the public again", far from it, they are more like special interest groups.

The sentiment is about right though.

[Chris Miller]

Re: Optional

We may be arguing about semantics, but still. Businesses pay VAT on things they buy and collect it on the things they sell. If you sell things for more than it costs to buy the constituent parts, you end up making a net payment to HMRC (that's where the 'value added' comes in). I don't know about you, but when I write my quarterly cheque, it feels a lot like a tax to me.

If we accept your view that companies are merely 'collecting' tax for the revenue, you could equally apply the same argument to show that income tax doesn't really exist, you're just 'collecting' it from the people that pay your income.

[Anonymous Coward]

Re: Optional

> If we accept your view that companies are merely 'collecting' tax for the revenue, you could equally apply the same argument to show that income tax doesn't really exist, you're just 'collecting' it from the people that pay your income.

This whole idea that corporation tax is not really a tax on consumers is so much twaddle anyway.

Taxes are all about finding excuses to extract money from people. Taxes on company profits is ultimately a tax on the the owners of the company or its shareholders. Making some sort of distinction between different taxes to make some moral statement is fruitless.

At the end of the day, whenever money moves, the government wants a cut. What people should be horrified and rightly angry about is the overall tax take by the government. We all (well perhaps most of us) accept that government is a necessary evil. We need public services. Frankly though, I don't ever remember voting for a very large quantity of my tax to be squiffed away on foreign aid, including "defence" costs abroad (the amount would stagger you, seriously), the bulk of the benefits system and the cut that the EU extracts from us. If we could just cut away a lot of that chaff, most of us wouldn't need to pay *any* tax at all.

Instead we are led by the media and politicians in righteous indignation at successful companies that are not "paying their way". Well I'm sorry guys, but we pay tax for government funded services. Exactly what government services are Google using to justify the tax that we're apparently demanding from them? Everyone has got so invested in the minutiae of the technicalities of tax rules and the idea of "fair play" that we have lost all sense of what tax should be all about. If we really feel that companies should pay their fair whack, then perhaps we come up with something a little more centred on paying for the services that companies use rather than what amounts to a tax on success?

The problem with this debate is that everyone has lost all sense of proportion.

[Andrew Stubbs]

Re: Optional

I think you need a better bookkeeper. Or if it's causing you pain, maybe you're in the wrong VAT scheme.

As for income tax... nobody is saying VAT doesn't exist. But don't get me started on NIC.

[Gio Ciampa]

And what's wrong with a good old corporate version of PAYE Income Tax?

Also... if it's earned here (no matter where the company is based) then it's taxed here.

Cut out 99% of the exceptions... and off we jolly well go...

(Tricky bit, as usual, is getting the politicians to agree...)

[SVV]

Here's how they "manage " : income tax mainly

Info : http://www.expatax.nl/tax-rates-2012.php

N.B Does not include local taxes, VAT, capital gains, health insurance premiums and many other taxes

Taxable Income Total Rate

< € 18,945 33.10 %

€ 18,945 41,95 %

€ 33,863 42 %

€ 56,491 52 %

So, that's how they support such high public spending : The ordinary working person coughs up loads more than the companies they work for. However, you get what you pay for, and that includes immaculately clean towns and cities, free public transport to and from work on a fast comfortable and comprehensive public transport system, exceptional healthcare and everything else that goes with living in a prosperous modern country. However the people are largely dour, money obsessed and boring and moan incessantly about everything they percieve to be wrong with one of the wealthiest places on the planet.

[Anonymous Coward]

Pardon my French

"Google's tax returns are trop peu" or " Google's tax returns are pas assez" are better IMHO.

[Phil 54]

Re: Pardon my French

Look in the address bar of your browser for an even better title.

[Richard Crossley]

Tax Harmonisation

When the French speak about tax harmonisation, they want the rest of of the world to have the same taxes as the French. How about having competitive taxes that attract business rather than victimise it?

[Anonymous Coward]

Re: Tax Harmonisation

You start a race to the bottom, then the tax has to be placed onto other things like income tax or VAT.

[Anonymous Coward]

Re: Tax Harmonisation

re: You start a race to the bottom, then the tax has to be placed onto other things like income tax or VAT.

Why does it have to be collected (and spent) as it is right now?

[Valeyard]

Go o'Gle

Google - Not the first American to claim to be Irish