Europe plans special tax for Google, Apple, Facebook, Amazon

Bruno Le Maire, France's minister for the economy, has revealed that a plan to levy a special tax on Google, Apple, Facebook, and Amazon will soon be revealed by European authorities. Le Maire told French newspaper Le Journal du Dimanche "A European directive will be unveiled in the coming weeks, the minister reveals, and it …

[Crisp]

I'm not sure that targeting specific companies is the way forward.

Tightening up existing legislation to effect a situation where it's more advantageous for all companies to pay their tax should be the way forward I think.

Currently the rules rewards companies that game the system and avoid paying their fair share.

[Peter2]

Re: I'm not sure that targeting specific companies is the way forward.

The problem is that the tax rules are so complicated that without doing a Trump unilaterially and rewriting the tax rules from scratch you won't ever really reform them into something sensible. (and even then, rules written unilaterially and quickly are likely to be a bit iffy) Corporate lobbying will tie the discussions about up for a decade and a couple of elections with large wads of cash on offer to election campaigns if parties will consider making just a few adjustments and exemptions...

The best route is probably to have a really big penalty to managing to evade the existing rules, and I think that a revenue tax is the best way to go for companies that have agressively avoided paying any tax.

The issue I have is simply the numbers mentioned here. Services companies can expect a 20% profit, and retailers can make much more than this.

Assuming that 20% of revenue is profit:-

10% revenue tax would be equivilant to 50% tax on profit

5% revenue tax would be equivilant to 25% tax on profit

2.5% revenue tax would be equivilant to 12% tax on profit

At the moment UK corporation tax is 20% tax on profit. If there is a 2% revenue tax applied as suggested off in the article then companies are still considerably better off than they would have been if they hadn't of gone evading tax to start with.

My take on it is that revenue taxes should be deliberately punitive and painful and applied individually to companies that have taken the piss for a multi year period, following which they can decide if they'd like to pay normal taxes on profits without playing games or if they'd like to keep revenue taxes. I'd say tax them at 15% of revenue (or higher) until Her Majesties Revenue & Customs have collected around 120% of what they think was been evaded by that company and then we could start talking about returning to a percentage tax on profits if they promise to be good.

If the affected companies struggle, good. Public services have been struggling as a direct result of them evading tax. If they become uncompetitive and are then replaced by other companies who pay their tax, then this is a good thing. People have died as a result of public services being overstretched and I see no good reason why corporations shouldn't end up in a worse off position than they would have if they hadn't of gone playing their little games.

[AMBxx]

Re: I'm not sure that targeting specific companies is the way forward.

It also misses out on the notion that Amazon's margins are a lot lower than Facebook and Google. Amazon actually have to buy stuff to sell (except for marketplace) whereas Facebook and Google have enviable gross margins.

[TVU]

Re: I'm not sure that targeting specific companies is the way forward.

"It also misses out on the notion that Amazon's margins are a lot lower than Facebook and Google".

What Amazon does is two things. The first is standard tax avoidance (zero sympathy for them there) and the second is that they do make very good underlying profits but what they do is reinvest to grow which also just happens to be very tax efficient too (again, zero sympathy for them especially when you see how Amazon treats its workers).

[codejunky]

Re: I'm not sure that targeting specific companies is the way forward.

@ TVU

"The first is standard tax avoidance (zero sympathy for them there)"

No sympathy for following the law. That opens up a can of worms.

"second is that they do make very good underlying profits but what they do is reinvest to grow"

Oh no! The business in investing in building the business which employs more people and is the point of making a business (to grow it to serve more people). If you dont like businesses investing in themselves then I can only recommend state controlled countries. Try N.Korea.

How can providing more of what people want, following the law and being successful now be seen as some kind of bad thing?

[Arion]

Re: I'm not sure that targeting specific companies is the way forward.

As an ex-Amazon employee; I have absolutely no qualms about how I was treated at Amazon.

[Anonymous Coward]

Re: I'm not sure that targeting specific companies is the way forward.

"As an ex-Amazon employee; I have absolutely no qualms about how I was treated at Amazon."

But were you working in a skilled job or in a warehouse?

[Anonymous Coward]

Re: I'm not sure that targeting specific companies is the way forward.

Amazon is making a lot more profit on AWS then 're-investing' (aka 21B profit in the last Q but 6.3B of R&D) so they overall don't report a big profit for tax purposes.

[DavCrav]

Re: I'm not sure that targeting specific companies is the way forward.

"It also misses out on the notion that Amazon's margins are a lot lower than Facebook and Google. Amazon actually have to buy stuff to sell (except for marketplace) whereas Facebook and Google have enviable gross margins."

Boo fucking hoo. Shouldn't have been dicks about paying tax/VAT (yes, also VAT, unless they are based in Luxembourg because of the nice views, although the law was changed to that this doesn't work any more) then should they.

[Anonymous Coward]

Re: I'm not sure that targeting specific companies is the way forward.

Don't confuse taxation with fairness or economic sense

[itzman]

Re: I'm not sure that targeting specific companies is the way forward.

This is similar to VAT. Except that there is no added about it. I suppose its simply a sales tax.

Well all that happens is the prices go up and the consumer pays, or they move to a brexited UK :-)

[Richard Jones 1]

Re: I'm not sure that targeting specific companies is the way forward.

They might have avoided tax, but tax evasion is a totally different animal and already subject to stiff rules - when they are applied. How many claim their tax free limits in various forms, that is tax avoidance, tax evasion is not declaring your income at all, hopefully all are virtuous in that regard or are we all?

[chivo243]

Re: I'm not sure that targeting specific companies is the way forward.

Kent Brockman says Avoision!

[Anonymous Coward]

Re: I'm not sure that targeting specific companies is the way forward.

>The problem is that the tax rules are so complicated

Yeah, about those take rules. I think Juncker might be able to help there as he was architect of them when PM in Luxembourg.

https://www.theguardian.com/business/2017/jan/01/jean-claude-juncker-blocked-eu-curbs-on-tax-avoidance-cables-show

[Anonymous Coward]

Assuming that 20% of revenue is profit

That assumption is pretty Big (as is the likely real profit-to-revenue ratio).

[LucreLout]

Re: I'm not sure that targeting specific companies is the way forward.

My take on it is that revenue taxes should be deliberately punitive and painful and applied individually to companies that have taken the piss for a multi year period, following which they can decide if they'd like to pay normal taxes on profits without playing games or if they'd like to keep revenue taxes.

That's the problem though - the companies haven't legally taken the piss, they've quite literally played by the rules and obeyed the law. You may feel it morally wrong that in doing so they have paid so little tax, but that not withstanding, they have paid what was legally due. If the law is to be set based upon moral judgements then we need to first determine who's moral judgements they will be - everyones idea of ethics and morals are different and personal to them.

I'd say tax them at 15% of revenue (or higher) until Her Majesties Revenue & Customs have collected around 120% of what they think was been evaded by that company and then we could start talking about returning to a percentage tax on profits if they promise to be good.

You don't seem to understand the difference between evasion and avoidance. Tax evasion is the process of breaking the law in order to minimise the tax paid, rather than the tax due. Tax avoidance is following the law in order to minimise the tax due and thus the tax paid. It's completely legal.

My concern is not how legislators propose to change the system to catch a few companies that are avoiding more tax than the legislators would like, but of the unintended consequences of passing such law. Today they target Google, Amazon etc, but tomorrow they WILL be targetting your local pub, bacon serving cafe etc with the same taxes. Income tax was brought about to fund the war with France. It just never went away. VAT was never intended to apply to all goods - it was supposed to be a luxury goods tax.

That said, if a business pays tax on turnover and makes a loss, does that imply that they can defray 2% of that loss onto the EU? Currently losses one year are deductible the next, so we need careful thought several steps ahead of where we are now, before launching such a tax. The problem with most tax legislation is the people writing it up assume it will be interpreted the way they wish and they assume companies and individuals will not seek to minimise payments due; neither of which has ever been true.

[Peter2]

Re: I'm not sure that targeting specific companies is the way forward.

You don't seem to understand the difference between evasion and avoidance.

You don't seem to understand the difference between semantics and the systematic collapse of public services as a result of companies deciding that they aren't going to pay any tax. If everybody is allowed to get away with this then our society is going to be financially as well as morally bankrupt and frankly we don't have 30 years to debate about it while these companies destroy local companies who are paying tax.

As I noted in my previous post, the revenue tax proposals are well under the levels of tax taken through profits. I am sure that businesses involved will all post huge losses as a result but at this point my sympathy is zero because they would cheerfully produce multi billion pound "losses" every year to offset against their future tax bills to continue paying nothing in tax so ignoring the posted losses is pretty essential really, isin't it?

If they wanted a system that only took a certain percentage of profits then they should have used and not abused the existing systems. I'd also be prepared for the tact that BigCompany™ will simply immediately outsource all operations with revenue in to BigCompanySubsidiary™, to reduce their posted revenue. The answer is simply to play games back faster and harder than they will do so that they come off considerably worse every time. If they go bankrupt as a result then they can stand as a warning to others.

[TVU]

Re: I'm not sure that targeting specific companies is the way forward.

"Tightening up existing legislation to effect a situation where it's more advantageous for all companies to pay their tax should be the way forward I think.

Currently the rules rewards companies that game the system and avoid paying their fair share".

^ I fully agree with all of the above. The proposed maximum turnover levy was framed at 6% and that should be the very least figure to be imposed on these tax avoiding companies.

That said, I'd really like to hammer them with something like a 16% turnover levy (given the competitive advantage these companies have over conventional companies that pay full corporation tax) and I'd add also two more scally tax avoiders to that list - Microsoft and Ebay.

[LucreLout]

Re: I'm not sure that targeting specific companies is the way forward.

given the competitive advantage these companies have over conventional companies that pay full corporation tax

As unpopular as it is, these companies HAVE paid the full corporation tax. CT is due upon profits, not turnover. Yes, they use carefully considered strategies to ensure they make most of their profits in lower tax jurisdictions rather than higher ones, but there's nothing illegal about that.

My local Costa coffee franchise does the same - the entity that makes most of the profit is offshore, while the cafe that does the trading is onshore, buying products and services from the offshore entity.

[Anonymous Coward]

Re: I'm not sure that targeting specific companies is the way forward.

6% sounds better to me. Maybe they can use it to replace all the money they wont be getting once the Brits leave the EU.

[Anonymous Coward]

Re: I'm not sure that targeting specific companies is the way forward.

Everyone's "fair" share is zero.

Politicians are the ones who game the system, so taking advantage of their imperfect gangster behavior is a fair game.

[Voland's right hand]

Haha - back to the communist economical theory

Eastern Europe used to use Turnover Tax instead of VAT.

The rationale was exactly that - to prevent endless chains of "low value/no value" addition and to ensure that anyone in the chain actually does something instead of being a letterbox for tax reduction.

USA and Western European economists had a field day chastising the arrangement and it was one of the first things to go once the wall has crumbled. It is quite funny how what goes around, comes around and we have resorted to Soviet Block economical methods.

The current proposal is somewhere in-between as the truth is somewhere in between. VAT in a 20Tn+ market results in the creation of a large amount of "tax efficiency" entities which parasitise on the economy. Pure turnover tax immediately creates vertical monopolies compared to which Amazon is a minnow. The truth is somewhere in between. 18VAT + 2Turnover sounds about right. It should be applied universally instead of targeting the valley.

[Pascal Monett]

You can laugh all you want

Here's the choice : waste more time trying to endlessly discuss a universal tax solution that will take a few decades to get to (and not get any tax money at all from anyone during that period), or decide on something now that will have an effect on the four largest tax evaders of the planet (and see billions come in immediately as a result).

The world is not perfect, and imperfect steps are the consequence.

[LucreLout]

Re: You can laugh all you want

or decide on something now that will have an effect on the four largest tax evaders of the planet (and see billions come in immediately as a result).

They can set up new legal entities vastly quicker than politicians can legislate against them. Your premise is flawed, which is why you think it'll raise billions rather than nothing.

[naive]

Re: Haha - back to the communist economical theory

What is communist about this ?. It is estimated that the big global companies de-fraud the EU for over 1000 billion Euros in taxes.

These taxes have to be paid by the employees, I pay 60%-70% of my disposable income to same State which facilitates by law one of the biggest tax sinkholes in Europe enabling google/Ikea and many others to get away with ten Euro tax on the million of profits they funnel to the Caribbean using the generous "rulings" the tax service of the King grants these poor companies.

And if it is indeed communist, please lets share the communism a bit more fair between the Global companies and me, since they have more than I do. Why am I ruled by communists, while Google is treated like an aristocrat in the period before 1789.

[Voland's right hand]

Re: Haha - back to the communist economical theory

What is communist about this ?.

The insistence that any element in a value chain does something productive and the application of financial instruments to do so and labelling anything that does not significantly increase the value of the goods as an economic parasite to be eradicated.

It is a cornerstone of modern Western economic theory that the amount of entities which goods and services pass through before they reach the consumer is irrelevant and the "economic parasite label" is something regurgitated from communist ideology. This is the whole idea behind VAT - to facilitate the smooth flow of goods and services across an arbitrary length of chains with the tax paid at the end (everyone else in-between gets a rebate).

The fact that we are labelling elements in the Holy VAT chain as parasites and using turnover tax to tackle the issue is as communist as communist gets. You can open any textbook from their 1980-es economics courses - there is a whole chapter on the subject singing odes to the virtues of turnover tax.

As I said before - the truth is somewhere in-between. In its pure form turnover tax is evil. Similarly, at the global level VAT is evil as you can always find a way of evading it. The truth is some combination of both - applied to every one so that the field is level.

[anothercynic]

Re: Haha - back to the communist economical theory

If the Netherlands are a lynchpin in arrangements like Double Dutch Irish Sandwiches, the Dutch 'Foundation' system etc, the pressure should be on the Dutch government to change its tax laws to make such things impossible or unprofitable (and I have it from several Dutch citizens that their government will still prefer not to rock the boat because in their view 1% of a decent-sized pie is still better than 15% of a smaller pie or no pie at all).

While it's easy to say 'oh, let's tax Google et al 2% of turnover', the more difficult question then becomes 'who gets what size cut of the 2% pie'... You can be guaranteed that there'll be a lot more squabbling going on then... especially when it then becomes clear that those countries with large offices (like Germany with Berlin, Munich and Frankfurt, France with Paris, Italy with Rome, and the UK with London) are the ones getting the most dosh and the other EU26 countries lose out.

But hey, it's easy to take 'leaks' like this one from the French finance minister as truth when the story is much more complex.

[Anonymous Coward]

Re: Haha - back to the communist economical theory

That "estimate" is simply a bald faced lie - designed to appeal to the greed of everyone who wants something for nothing.

Apply a special targeted tax, and watch the consumer - yes, that's you personally - pay that tax. Learn something about tax incidence, companies ultimately don't pay taxes though they may hand over money - the tax is really paid by owners, buyers, and staff in some ratio.

One other, why include Apple. There's some grounds for treating those in a dominant market position as monopolists or at least potential monopolists, but Apple ? Has a minority position in every market it competes in and sells expensive equipment at enviable margins by some combination of clever marketing and superior perceived functionality. They are not at all comparable to Google, Amazon, or Facebook, all of whom dominate most the markets in which they compete. Targeting Apple is even more clearly a simple greed tax - and politicians demands for more of other people's money that they can pretend to hand out to their voters as bribes are insatiable.

[Roland6]

Re: Haha - back to the communist economical theory

>It is estimated that the big global companies de-fraud the EU for over 1000 billion Euros in taxes.

Currently "the EU" doesn't levy taxes, it merely asks member states to contribute a proportion of their GDP. So strictly it is the members' exchequers who are being defrauded...

However, for this turnover tax to work, it will probably need to be levied on EU cumulative turnover and thus, don't be surprised if the revenues from it end up going directly to Brussels - in part because it is going to be difficult to divvy it up between member states, so might as well collect it centrally and use the monies for EU projects...

[Anonymous Coward]

The UK is going to be very useful after brexit for logging revenue in the EU.

[Voland's right hand]

Why?

The UK is going to be very useful after brexit for logging revenue in the EU.

That will be the case only if UK is in the Customs Union. Otherwise it depends on the actual Leave arrangement. Probably - no.

[Anonymous Coward]

Re: Why?

I don't know, logic tells me we will be in a customs union or some similar agreement. Too much money involved for either side to cut their nose off to spite their face.

[ToddRundgrensUtopia]

Re: Why?

A customs union would be the very worst of all possible outcomes for the UK economy in the long term. No way of making trading deals with anyone else and controlled by the slowest growing economy on the planet, the EU. Only a knucklehead aka Corbyn, Soubry or ex bureaucrat with an EU pension, e.g. Mandelson, and all members of the Kinnock gang, could possibly thinks its a winner.

[Graham Dawson]

Re: Why?

The customs union is a red herring. All that does is tie us to a common set of tariffs and trading agreements with the rest of the world. It says nothing about trade between its members, as turkey found to its cosy when it joined a customs union with the eu. Trade between turkey and the eu faces significant barriers, both in terms of tariffs and quotas, and in terms of non-tariff barriers such as detailed border inspections and shirty customs officials.

The bit that leads to "frictionless trade", as I think the buzzword us now, is the single market. As an EEA member, Norway is a member of the single market, but not a member of the customs union. The result is that Norway enjoys nearly no barriers to trade with the rest of the EEA, but can set its own trade relationship with the rest of the world, rather than being tired to the common customs code of the customs union.

[anothercynic]

Re: Why?

@Graham Dawson, but Norway has to, like Switzerland, pay in for regulations (and is bound to them), which is what Brexit was all about breaking free from... i.e. 'Taking back control'.

But as usual, Britain wants the cake and eat it too, i.e. free trade with the EU with none of the regulations to be bound by, freedom to trade with others the way it sees fit. It wants what it can't have.

[Graham Dawson]

Re: Why?

@anothercynic the eea only implements a very small subset of regulations from the eu, most of which aren't even generated by the eu anyway, but rather at the international level, such as at the unece, iso or wto. They have none of the requirements for harmonisation of national policies or regulation of internal markets unrelated to their relationship to the eu. The price is that they have less-than-unfettered access to the single market. However they have nearly none of the tariff and non-tariff barriers that a third country faces when trading with the eu and still have freedom of trade policy with the rest of the world.

Had saner minds prevailed, the first words from May's mouth after her appointment as pm would have been "we are switching to the efta and remaining in the eea until we can work out a complete solution". Unfortunately we are governed by idiots who think, as you say, that they can have their cake and sell it to the highest bidder too.

[anothercynic]

Re: Why?

Remember though that joining EFTA also requires full agreement from all EFTA members (I recall this analysis being done shortly after the referendum). Norway at the time of *that* discussion pondered whether the UK joining EFTA instead would be a good idea for the other EFTA members, with the implication that Norway would be inclined to vote 'nei' when it came to it. Of course, what was said then and what might be arranged in the future is... two widely different things :-)

[Roland6]

Re: Why?

>Remember though that joining EFTA also requires full agreement from all EFTA members

However, the UK is already a member of the EEA, I've not seen any argument that successfully explains legally why the UK leaving the EU means it also has to leave the EEA. Now (post-Brexit) with the UK outside of the EU, the EEA might be more than happy for the UK to change its membership to EFTA status...

Yes, I totally accept some Brexiteers want to cut all ties with the EU and Brussels, but that is a different matter to the referendum question.

[jonfr]

Re: Why?

Norway, Iceland and Lichtenstein (Swiss has its own 120 agreements with the EU) all have customs on imported items. This is a major problem if I want to buy an electronic device from Amazon to Iceland because its not shipped there but it does ship inside the EU just not to EEA country.

UK is going to feel that soon after it leaves the EU.

Norway, Iceland have to deal with import quotas from the EU on their exports (fish, sheep meat and items). This has a been a major complain in Iceland for many years because they wan to import more to EU without import quota, yet at the same time don't want to join the EU that would get rid of those import quotas. The fact is that they can't have it both ways in Iceland or Norway and soon in the UK.

[Anonymous Coward]

Re: Why?

"UK is going to feel that soon after it leaves the EU."

Unlikely - you can buy pretty much everything you need here in the UK. There is little need to order anything from the rest of the EU. We are not some small third world fish eating nation...

[macjules]

GDPR anyone?

They have realised that companies like Google and Apple, and their data processors, would actually make the effort to make all sites GDPR-compliant so now they have to use a different method.

Several hundred years ago such a tactic was usually accompanied by a shout of, "Stand and deliver"

[Anonymous Coward]

Re: GDPR anyone?

"They have realised that companies like Google and Apple, and their data processors, would actually make the effort to make all sites GDPR-compliant so now they have to use a different method.

Several hundred years ago such a tactic was usually accompanied by a shout of, "Stand and deliver""

If you are suggesting that GDPR is designed as a hidden tax then you are very mistaken. It's designed to make sure it's far more expensive to break EU data protection law than to break US law for any company pressured by US extra territorial data grabs - a rather different objective.

[msknight]

I wonder....

...what this is going to mean for businesses trying to claim back the VAT from services they buy from the big four. Probably a headache for the accounting departments.

[Pascal Monett]

Re: I wonder....

VAT is not being evaded by the companies. They have to pay it, and the paper trail is incontrovertible. No amount of offshore patent invoices will erase VAT.

So the accounting departments will have the usual amount of headache, nothing more.

[msknight]

Re: I wonder....

Yes, but if I'm a business and I buy something from Google, I pay 20% VAT. If Google are charged a flat rate, then what does that do to the transaction? Or does VAT carry on as usual, and then Google are charged an extra tax on top of that?

[Anonymous Coward]

Re: I wonder....

It will be VAT as usual, and a flat tax on top, so all our Amazon bills will go up by 2% with a new "EU revenue tax" item added to them to cover the extra. Just like hotel bills have that extra little "tourist tax" tacked on at the end. It will make no difference to Amazon et al, and the EU will get blamed for screwing the consumer. As usual.

Just simplify the existing tax rules, FFS.

[DavCrav]

Re: I wonder....

"It will be VAT as usual, and a flat tax on top, so all our Amazon bills will go up by 2% with a new "EU revenue tax" item added to them to cover the extra."

No they won't. If you think £5.99 will change to £6.11, you have another thing coming.

The point is that other companies have to pay tax, and now so will Amazon. If that removes some of their competitive advantage (from being close to, but not quite, illegal), then that's great. If Amazon prices have to go up, then good, because they are artificially low right now. If Amazon prices don't go up, even better, as the tax authorities get some of what is due with no problems for anyone other than Amazon.

[Anonymous Coward]

Re: I wonder....

If you think £5.99 will change to £6.11, you have another thing coming.

Oh, I'm sure a headline item price like that won't change, but 5.47 could well become 5.58, and when you get to the final basket with all the items, the shipping, etc. you'll see a little extra line appear "includes 2% EU turnover tax".

[Anonymous Coward]

Re: I wonder....

They're paying what's due - or rather you are paying. If they weren't they could be prosecuted - and they aren't.

But sure, advocate for additional taxes on the consumer - fine, but why don't you just donate more money to the taxman already if you're so keen ?

[Finder Keeper]

Re: I wonder....

> If Amazon prices have to go up, then good, because they are artificially low right now.

Found the central planner?

[Pascal Monett]

Yes, VAT has nothing to do with this tax bill.

The tax bill concerns income, not VAT.

[JohnMurray]

Re: I wonder....

If you're a VAT registered company, you claim it back...

[Steve Davies 3]

Where is the Tax on Microsoft and IBM then?

Or are the Politicians so far up their backsides that they'll escape the turnover Tax?

[Tom 7]

Re: Where is the Tax on Microsoft and IBM then?

Try to tax Microsoft and they will upgrade you to Windows 10 while you are not looking.

[Teiwaz]

Re: Where is the Tax on Microsoft and IBM then?

Try to tax Microsoft and they will upgrade you to Windows 10 while you are not looking.

Just thinking about having to use Windows is taxing enough....

I need a lie down....and a drink.... make that several drinks and a lie down....

[T. F. M. Reader]

Re: Where is the Tax on Microsoft and IBM then?

Try to tax Microsoft and they will upgrade you to Windows 10 while you are not looking.

Try to tax Microsoft and they will upgrade HMRC/IRS/etc. to Windows 10 while they are not looking.

FTFY

[Mage]

Good idea

Taxing profits is now pointless with the creative bookkeeping or borg like takeovers to expand control (see Amazon 1998 to now).

This list is incomplete; you can help by expanding it.

~

So yes you need to identify specific companies. Apple has less than 14% of smartphone market, their main activity is smartphones. Yet one of largest companies by share value in the world. Paid less than 1% Corporation tax in Ireland (yet rate was 12.5% most of the time). Now moved EU tax HQ from Ireland to the UK Jersey Tax haven because EU has rumbled it and insisted 13 Billion underpaid.

In Ireland alone, paying nothing like % tax of local companies: Analog Devices, Qualcomm(?), IBM, PayPal, Microsoft, eBay, Facebook, Uber, Intel, Sky. Previously Apple & Eircom (Eir).

[Anonymous Coward]

Ah, the EUSSR is showing its true colours at last!

[TVU]

"Ah, the EUSSR is showing its true colours at last!"

Who pays then for for the societal infrastructure such as roads, broadband, electricity, etc. that these companies need and use then? Oh, that's right, it's the rest of us.

[Anonymous Coward]

@TVU

Who pays then for for the societal infrastructure such as roads,

NOT the totally unelected commissars of the EUSSR. Those things are paid for by the individual countries even though the commissars dictate what those countries can do with them.

[Anonymous Coward]

And that's who always pays, you, as owner/worker/purchaser - you pay and companies don't.

You've fallen into that old fallacy assuming that "someone else" will pay for what you want and that there's some form of free lunch.

Sorry, only people pay taxes.

[Frank Fisher]

EUSSR

Taxing *turnover*? Let's remember that many companies have high turnovers and are, as yet, not profitable. So you would tax companies into deeper losses. And taxing companies be diktat? IE, we will tax this company and that company, but not you, you'r eok.

How can anyone be okay with this? Open your eyes people. This is rotten.

[Tom 7]

Re: EUSSR

And companies taking fortunes out of economies without paying tax while they work out how to make a profit while their shareholders get wealthier and wealthier is OK?

Its hard to run a business to make a profit but that doesnt mean the taxpayer should subsidise the company for ever.

[MrXavia]

Re: EUSSR

"while their shareholders get wealthier and wealthier is OK?"

If a company is not profitable, then they shareholders don't get any dividends,

they only way they make money is if they sell their shares....

No fortune is being taken out of the economy, in fact by definition a loss making company is spending more than they make, so that money is coming out of investors pockets and into the economy...

So far all I see is idiotic politicians and economists with no real ability to think suggesting rash ideas to take money from someone and give it to themselves in one way or another...

The tax system is broken globally, the UK tax system is a mess... too many different taxes and too many ways for big companies to try and avoid paying it, yet the little guy is over taxed

[DavCrav]

Re: EUSSR

"No fortune is being taken out of the economy, in fact by definition a loss making company is spending more than they make, so that money is coming out of investors pockets and into the economy..."

The problem, as you either don't see or pretend not to see, is that (for example) Starbucks is a profit-making company globally, but miraculously a 'loss'-making company everywhere other than tax havens. The point is, they aren't loss-making, they are lying. A turnover tax should be considered a 'tax of last resort'. It's the equivalent of saying 'You're a liar. Everyone knows you're a liar. We can prove that you are behaving like a massive bunch of dicks, and this is the result. You brought it on yourself, now open your wallets you greedy bastards.'

[Anonymous Coward]

Re: EUSSR

Bullshit, you're just another greed merchant. You pretend that you have some right to what money others make - cunt.

[DavCrav]

Re: EUSSR

"Bullshit, you're just another greed merchant. You pretend that you have some right to what money others make - cunt."

Starbucks paid £8.6m on £3bn in sales in the years up to 2015. Now either that's one deeply unprofitable company, or they were lying.

So that's dealt with your charge of 'bullshit'. As for calling me a cunt, you should perhaps not engage in personal abuse on a UK site. The Prevention from Harassment Act applies, and 'Anonymous Coward' is just a button you press, your IP is logged and available to Plod if a complaint is made. I won't make a complaint, but you are approaching a public order offence. Note that the woman who recently left a sweary note on an ambulance was charged with a public order offence, and she did not actually engage in direct abuse and you have done.

[Tim Seventh]

Re: EUSSR

"Bullshit, you're just another greed merchant. You pretend that you have some right to what money others make - cunt." -AC

"As for calling me " -DavCrav

You might want to take a break. There is no direct indication that the AC is replying to your point. Rather there is possibility that the AC replying to 'Frank' about taxing turnover yet not profitable or to 'Mage' able Shareholders running it into the ground, which in one case could be on your side.

Have a drink and take a break.

[LucreLout]

Re: EUSSR

Starbucks paid £8.6m on £3bn in sales in the years up to 2015. Now either that's one deeply unprofitable company, or they were lying.

Its the former, not the latter. Now, you may think they are intentionally unprofitable, but as taxes are paid upon profits, it doesn't matter why they are unprofitable.

There should be nothing wrong with a business owner choosing to reinvest all the profits of his enterprise back into the business in order to achieve business growth and thus greater profits. Eventually all such businesses reach a nadir and start making profits - Microsoft, for instance, once reinvested everything in the business but now pays out dividends and taxes on profit.

While I consider the personal abuse directed at you as unsporting, uncivilised, and unneccessary, I would politely and with respect point out that Starbucks undoubtedly have a great many expensive lawyers and your calling them out as liars could have adverse consequences. I hate lawyers, so please adhere to your own sage counsel you provided the other poster.

[Mage]

Re: company is not profitable, then they shareholders don't get

Curiously not true. Shareholders and Management may be asset stripping / running it into the ground. Plenty of examples recently and over last 30 years, USA, UK & Ireland.

Enron, UK Ever Ready, Eircom, Anglo Irish Bank, Carillion.

[Adam 52]

Re: EUSSR

It's a shot across Trump's bows. Trump wants a trade war with Europe, China and everyone else. He's threating import duty on European cars. This is one way for the EU to retaliate.

[Mage]

Re: many companies have high turnovers and are, as yet, not profitable

Amazon (since 1998) is DELIBERATELY not very profitable. Using income to create monopolies, market dominations, greater empire.

Other companies use shell companies with so called IP to look unprofitable (Starbucks).

Others are parasites (KFC & McD retailers provide the capital/premises, employ staff) such as Uber, AirBnB who are really just Internet version of Yellow/Golden pages and slurping all the customer and driver/renter data to also make money.

Note Amazon & eBay etc are really just internet versions of Mail Order and Google & Facebook are really just advert agencies. Many big name Global Tech companies are just USERS of Tech to exploit their markets. Other big US Tech companies are primarily marketing companies as they often buy in new tech by take-overs and outsource most manufacturing.

So shouldn't be automatic.

[Roland6]

Re: EUSSR

> Let's remember that many companies have high turnovers and are, as yet, not profitable

Funny how Uber and AirBnB (to name just two) seem to be missing from the list...

[LucreLout]

Re: EUSSR

Taxing *turnover*? Let's remember that many companies have high turnovers and are, as yet, not profitable.

I do wonder what such ideas will do for our tech startup industry, much of which is not remotely profitable for many years, then suddenly very profitable.

Global scale companies like amazon will simply avoid the tax by breaking down their onshore presence into smaller legal entities such that they don't hold a dominant positionin any one market. Amazon-UK-Cd-Sales Ltd, for example. They can also afford to burn through those entities at will, such that legislation targetting them will be moot because they'll have moved on to Amazon-UK-Cd-Sales-2 Ltd, for example.

You can't force a global player to give your country whatever it wants - whatever your personal thoughts on it, global entities have transcended national boundaries and act as such. What you can do, however, is entice them. Less can be more. Reducing corporation tax to a level that makes avoiding it more potential hassle than its worth will see a flood of companies paying their CT here; its a strategy that has worked for decades for every single low tax environment in the world.

[ratfox]

What companies are forced to sign up?

I mean, the tech giants are all — technically — following the rules as it is. Why would they sign up for an additional tax? Are governments simply going to decide case by case who should pay that tax?

Apart from that, I'm thinking that Apple, Google and Facebook might be fine with a tax on turnover, because they have massive margins. That's probably going to hurt Amazon a lot more, though.

[Anonymous Coward]

Services companies can expect a 20% profit, and retailers can make much more than this.

If you're Harrods perhaps - but many retailers work on wafer-thin margins.

It looks like there are two issues here:

* Consumer products (Apple/iPhone). They pay import duty and VAT on those, so already pay a large slice of tax. But they still generate large profits.

* B2B sales (Google/advertising). VAT does not come into play, because the business customers just offset it against their own VAT liabilities. But there *could* be a special advertising service tax, like insurance premium tax.

* Amazon falls into both: it's a retailer, and it does B2B (web services). But apparently Amazon chooses to run its business in such a way as not to make a profit in *any* jurisdiction, in order to take over its markets.

But in most cases, it's a question of multinational companies transferring profits generated in one country by various licensing/chargeback schemes, so as to pay less corporation tax in another.

ISTM that the majority of profit generated by sales within country X should be subject to country X's tax; and that once that tax has been paid, the profit can be transferred to any other country without paying additional tax.

[maffski]

But in most cases, it's a question of multinational companies transferring profits generated in one country by various licensing/chargeback schemes, so as to pay less corporation tax in another.

In general we think competition is a good thing. So why isn't competition in tax regimes a good thing?

You may think an Irish/Dutch sandwich with BVI side salad is a bad thing, but I'd put money on French taxes being higher if it didn't exist.

[DavCrav]

"In general we think competition is a good thing. So why isn't competition in tax regimes a good thing?"

Because competition drives efficiency, by inefficient companies being liquidated or taken over. That's not a good plan for countries. 'Sorry, you aren't being very efficient, so Germany is going to take your country over' wouldn't go down well more or less anywhere.

And you know that but are being deliberately dense. Stop it.

[maffski]

competition drives efficiency... ...That's not a good plan for countries

Because competition drives efficiency, by inefficient companies being liquidated or taken over. That's not a good plan for countries.

Mostly it forces organisations to become more efficient, this is just as true for a country as a company.

And liquidation and take overs? That's just sovereign default and revolution. Neither of which are especially uncommon.

[codejunky]

@ DavCrav

"Because competition drives efficiency, by inefficient companies being liquidated or taken over. That's not a good plan for countries."

Actually it is. If all we have is inefficient companies being propped up by unending funds we end up with a 3rd world country. It is a good job 90% of the population is not working in the fields to grow enough food to barely survive on. As it stands we import a huge portion because we cannot grow enough here and who would want to? We outsourced a lot of dirty and hard manufacturing work while doing the R&D which is cleaner and worth more. The low value work of manufacturing chips and parts then assemble into a mobile phone is not done in the west, it isnt worth our time. Yet it is that innovation which has the UK at full employment.

"Sorry, you aren't being very efficient, so Germany is going to take your country over"

Which country produces everything they have? I cant think of one but probably some middle of nowhere, 3rd world without vehicles or any semblance of modern life. If that is what you like then thats up to you. Personally I like my computer with parts from around the world and development from the world, food from around the world, cars designed and manufactured around the world. Otherwise you are arguing for protectionism. And when Trump did that against China's steel he caused a negative effect of the economy.

[Peter2]

Competition is seen a good thing because it leads to better products or services, with the crappest going out of business. 99% of people benefit, with the remaining 1% being the employees of the organisation that went out of business.

What you a describing as "competition in tax regimes" is in fact companies being resident in a country defrauding that country of the amount required to maintain infrastructure such as schools and hospitals. If done on a wide scale, this leads to that infrastructure collapsing. This is generally considered as being undesirable, especially by the people living in those countries.

[Uberseehandel]

Base taxation on inputs and outputs

There is an ever increasing trend for global corporations to buy inputs (labour, materials etc) in one group of countries and to sell them in another group of countries. By way of example, consider where Apple has its devices manufactured and where they sell the bulk of them.

So a taxation system for global corporations should base the calculation of tax on total economic activity, rather than just outputs (sales). Under normal circumstances, the sum of inputs and outputs would be under twice the output (profitable). An equitable percentage of this sum would levied by way of taxation and distributed to the taxation authorities of the nations in which economic activity occurred on a basis that reflects the proportion of the activity in that nation to the total global activity.

[DavCrav]

Re: Base taxation on inputs and outputs

"So a taxation system for global corporations should base the calculation of tax on total economic activity, rather than just outputs (sales). Under normal circumstances, the sum of inputs and outputs would be under twice the output (profitable). An equitable percentage of this sum would levied by way of taxation and distributed to the taxation authorities of the nations in which economic activity occurred on a basis that reflects the proportion of the activity in that nation to the total global activity."

That is, and it was up against some pretty stiff competition, the stupidest idea I have heard this month. Congratulations.

If you want an explanation as to why it's stupid, here goes: the economic activity done in the producing country, say China, is labour. That labour is taxed. The economic activity in say the UK is consumption. That is also taxed.

If I buy something for £100, someone has sold something for £100. If I then sell it for £150, I have made £50 profit, and the other person has also hopefully made some profit, but any way you cut it, your idea seems to be to slice it off both sides. I pay to buy stuff and I pay to sell. You can do that if you want, but it's bizarre and pointless.

In fact, the more I look at your post, the less sense it seems to make.

[Uberseehandel]

Re: Base taxation on inputs and outputs

@Davcrav

The countries in which products are manufactured deserve a slice of the tax pie every bit as much as the countries that buy the products. What we are looking for is not only the elimination of tax avoidance but a fair basis of distribution of the tax proceeds.

Your example does not address this. You are another person who condemns out of hand what they do not understand or are familiar with.

When all nations have similarly effective taxation regimes, there may be a case for a "payroll tax" adjustment to the share of tax revenue payable to some nations.

Unless the inputs are brought into the equation there is no way to fairly allocate the revenue raised amongst the nations in which that nation does business.

[DavCrav]

Re: Base taxation on inputs and outputs

"You are another person who condemns out of hand what they do not understand or are familiar with."

It is not impressive to explain badly and then act all smug if someone doesn't understand you. But I think I do understand you and you are just wrong.

You don't seem to understand what is taxed. Economic activity is taxed. If the UK levies a consumption tax, say VAT at 20%, it shouldn't send some of that money to another country because that good was an import. This is insane. If China wants to tax that good it can tax it as it leaves China, that's easy. The UK government, like all governments, raises money to fund UK services, and does so by taxing bits of the British economy. In an ideal world there wouldn't be any tax, but because of social and pure public good issues we need it.

Put it another way: since more or less all modern technology is based on British inventions, does that mean that the UK should be paid a sizeable fraction of everything anyone does? If not, why not?

Actually, I've decided you are the economics version of one of those people who thinks that they've found the real value of pi, and it's just that nobody else can understand their genius.

[LucreLout]

Re: Base taxation on inputs and outputs

What we are looking for is not only the elimination of tax avoidance

Then reduce taxes, because there is literally no other way in which you will ever eliminate tax avoidance. Sorry if that fact doesn't fit your world view, but it is your world view that must change, because that fact won't.

[Uberseehandel]

Re: Base taxation on inputs and outputs

I see this suggestion has attracted a thumbs up, and two thumbs down.

Thumbs up I expected, the thumbs downs causes me to really wonder what motivates those people.

[DavCrav]

Re: Base taxation on inputs and outputs

"I see this suggestion has attracted a thumbs up, and two thumbs down.

Thumbs up I expected, the thumbs downs causes me to really wonder what motivates those people."

I can tell you what's going to motivate people to downvote that message. It sounds really whiny.

I've been guilty of it before -- moaning about getting downvoted -- but it's just a red rag to a bull. You should just take it on the chin.

[TrumpSlurp the Troll]

Conflicted as usual.

On one hand these huge corporations are perceived to be taking the piss. Frustration at "profits, what profits?" results in "right, smartarse, we'll tax your turnover instead!".

On the other hand they seem an easy target which will make politicians popular. Look, voters, free money. As a Baby Boomer I am very suspicious of this approach, being the target of the "Look, kids, they have all the money. We will grab some (for you of course). Look at all those bad people with all that money they didn't work for.". Fellow BBs may not feel that they have idly coasted to unimaginable wealth whilst contributing nothing of value. YMMV.

All the way back to pension fund surcharges (look, free money), no tax relief on pension fund dividends, yada yada there has been a constant push to asset strip any value stored anywhere presented as free money taken from the undeserving.

So although I believe that everyone should pay their fair share and recognise that big multi-nationals have far more money to spend on "tax efficiency" than countries have to spend on tax collection I can't help but be deeply suspicious of any move which targets just a few firms with the "Look! Bad people over there with free money!" approach.

[DavCrav]

Re: Conflicted as usual.

"As a Baby Boomer I am very suspicious of this approach, being the target of the "Look, kids, they have all the money. We will grab some (for you of course). Look at all those bad people with all that money they didn't work for." "

Yeah, but old people have lots of wealth but still want lots of services. Young people don't use those services very much, and have no wealth, because old people have it. There's no choice but to grab old people's wealth, because they are the only ones with any.

[Adam 52]

Re: Conflicted as usual.

Baby Boomers have all the money because they were given it by their parents in the form of grants and subsidy. Stole from their parents through cheap sales of national assets, and "borrowed" from their children in the form of debt and property prices. Yet they still want their children to pay for their triple locked and defined benefit pensions, as well as their healthcare in old age, whilst denying those children the same benefits (unaffordable, don't you know).

You can see why reclaiming some of their ill gotten hoard sounds attractive.

[DavCrav]

Re: Conflicted as usual.

"Stole from their parents through cheap sales of national assets"

Stole from their children you mean. National debt, house prices and pensions are a trillion-pound intergenerational theft, and my generation knows that your* generation is responsible. When we get in power, you'd better pray.

* If you are of that generation.

[LucreLout]

Re: Conflicted as usual.

When we get in power, you'd better pray.

Thus neatly illustrating why we urgently need another conventional world war, to reduce the excess of Millenilals.

I'm not a boomer. I'm Gen X. Nobody gave me anything and I took nothing from your generation - my generation has never had and will never have any political power. Yet I have this deep seated fear that I'll get caught up in this Millennial wealth theft that you say will be targetted at the boomers (whether or not such thing could ever be justifiable).

If you want the trappings of success, then firts you need to succeed. If you want the rewards of a lifetimes hard work, then work hard for a lifetime first.

Millennials. Trully a waste of oxygen, generationally speaking.

[Loyal Commenter]

Re: Conflicted as usual.

I, too, am a Gen X'r. It's our generation the Baby Boomers stole from, and our generation that is in a large part trapped in rented accommodation where the money flows back to them.

Millennials may be on occasion annoying (I had the misfortune to be sat next to a particularly vapid pair in a restaurant only last night), but they're not to blame, and describing them as a 'waste of oxygen' achieves nothing more than setting yourself up as the future villain of the piece.

[LucreLout]

Re: Conflicted as usual.

I, too, am a Gen X'r. It's our generation the Baby Boomers stole from

And yet, financially, I have done a great deal better than my Baby Boomer parents. Granted, my boomer parents didn't do very well financially....

I have had opportunities that were simply never open to my parents - university twice (yes, debt included), travel, freedom to work in a whole raft of countries, the internet (its never been easier to start a small business to supplement wages). Fortunately I stumbled onto the core ideas of how capitalism works and have been able to play the game marginally more effectively than my folks.

If Millennials are not to blame for their flakey, overly emotional, special snowflake, I want it all on a plate NOW attitudes, then who is? I'm not. My kids are only primary school age but already understand the concept that money comes from going to work and that they can't spend that money twice. Some other countries millennials aren't nearly so emotive and hapless as ours, so what went wrong? Indulging their behaviour and empty headed views about sequestering the wealth of those that produced it will not rectify the problem: indluging spoilt children does not produce beneficial outcomes.

One, only one, of the millennials I work with has managed, by 25, to save for a deposit and buy his first flat. The only thing special about his generation is he has a bit more get up and go about him. His views on the rest of his generation make mine seem all cupcakes and rainbows.

[Loyal Commenter]

Re: Conflicted as usual.

If Millennials are not to blame for their flakey, overly emotional, special snowflake, I want it all on a plate NOW attitudes, then who is?

Maybe the people who want to tar an entire age group with the same brush.

I can certainly remember being that age. You may differ from others in that you were able to develop a mercenary attitude towards others at an early age and get ahead. Thank $deity that not all folk are like that, or our species is doomed.

It sounds very much to me that you are blaming the young for their youth and inexperience at life. Our generation had the benefit of free university education, whilst lumbering them with debt when they try to gain the same advantages. Their job opportunities consist largely of zero-hours contracts, 'gig-economy' jobs with no security, poorly paid apprenticeships or internment in a call centre. Is it any wonder that you can only think of one person in that age range that has managed to get ahead?

[LucreLout]

Re: Conflicted as usual.

You may differ from others in that you were able to develop a mercenary attitude towards others at an early age and get ahead.

Getting ahead by working hard and smart does not a mercenary attitude make.

It sounds very much to me that you are blaming the young for their youth and inexperience at life.

No, but I do blame them for this soft, overly emotional, and intentionaly helpless outlook they have gifted to themselves. Who else would you blame for it?

Our generation had the benefit of free university education, whilst lumbering them with debt when they try to gain the same advantages

No quite. I only completed my masters a few years back, while communit 15 hours a week, working 40+ hours a week, and raising a family. It wasn't easy, but then it isn't supposed to be. I took a modern approach and studyed online when I have time, which kept fees low and preserved my ability to work. There's nothing about that a millennial can't do - most don't even have kids yet!

Their job opportunities consist largely of zero-hours contracts, 'gig-economy' jobs with no security, poorly paid apprenticeships or internment in a call centre.

That'll come as a startling revelation to the 15 millennials I work with. They have this crazy idea that they're professional software developers. Whodathunkit.

Is it any wonder that you can only think of one person in that age range that has managed to get ahead?

Oddly enough, he's the only one that doesn't have a nearly new iPhone (older Android), eat crushed avocado (brings food from home), or go on far flung holidays 3 times a year. Its a question of priorities.

He doesn't live in his preferred bit of Essex either, but 10 years from now he'll be able to, as he'll have the equity. The rest of his cohort will either be living at home with mam & dad, or rubbing their greedy mits together while voting to steal their house. It's not nearly good enough to pretend others are mercenary while plotting wealth taxes - the legalised theft of others hard work.

[LucreLout]

Re: Conflicted as usual.

There's no choice but to grab old people's wealth, because they are the only ones with any.

Sure there is. You can do what they did to acquire it - work hard over a whole working lifetime, spending less than you earn, and investing the difference in property, shares, or some other such thing.

Simply voting to award yourself what they earned may not feel to you as though it is theft, but that is only because you're receiving the stolen wealth.

[Loyal Commenter]

Re: Conflicted as usual.

Sure there is. You can do what they did to acquire it - work hard over a whole working lifetime, spending less than you earn, and investing the difference in property, shares, or some other such thing.

...and buy a semi-detached house with a garden at 4 times your salary. Oh, wait...

[LucreLout]

Re: Conflicted as usual.

...and buy a semi-detached house with a garden at 4 times your salary. Oh, wait...

At 12.5% base rates. Its no good looking at the principle and not the interest. The TCO in terms of proportion of household income is largely unchanged - its just that now typically women work too, which is why singles are priced out.

You can buy and run a 3 bed family home in Omagh for less per month than it costs to buy a new iPhone. https://www.telegraph.co.uk/business/2016/05/08/cost-of-running-a-home-in-the-uk-now-almost-half-of-all-househol/

Sorry, but I've demonstrated time and again on this forum why housing is affordable even to a minimum wage couple. A family home in Westminster may not be, but a starter home in Luton absolutely is.

[Loyal Commenter]

Re: Conflicted as usual.

I think there might be a reason why housing in Omagh and Luton is inexpensive. If you think carefully, you might be able to work it out for yourself.

[LucreLout]

Re: Conflicted as usual.

I think there might be a reason why housing in Omagh and Luton is inexpensive. If you think carefully, you might be able to work it out for yourself.

Ok, if young first time buyers don't start at the lowest wrung of the property ladder, whom exactly is it you think should live there? It's not a case of "I deserve better than that just for being me" is it?

My first (current) house was in Luton, because that was where I could afford to buy. When I move in a couple of years, my next house won't need to be. Sitting about moaning that life fair isn't help anyone, and it isn't particularly going to make you feel much better either.

While some have sat about moaning for a decade, I've paid off a 6 figure chunk of the mortgage, making better mortgage rates available to me, which has reduced the cost of borrowing, and further increased how much of the mortgage I can clear each month. I'd have preferred to stay in Clapham, but I couldn't afford it. Another house move or two and I possibly could.... but I probably won't want to by then.

Do people really imagine baby boomers just moved into 3 bedroom family homes with all mod cons, or do you think most of them had to buy where they could afford and work their way up to the family home Gen X / Millennials grew up in?

The expectation gap between your parents last house and what should be your first house is where the problem is, rather than with the affordability of the latter.

[a pressbutton]

I always thought that if you made large companies work out tax on two/three orthogonal bases and make them pay the larger of the results,

you would get a reasonable (*) amount from all companies without targetting and one company / sector.

(*) depends on your defn of reasonable.

[KSM-AZ]

bwahahahahahaha

Taxing "turnover". That's just a sales tax to be paid by the consumer. What a joke.

[Loyal Commenter]

Re: bwahahahahahaha

Taxing "turnover". That's just a sales tax to be paid by the consumer. What a joke.

If a company is making profits and driving the competition out of business by taking an unfair advantage by moving its tax liabilities around the world, and therefore undercutting companies which don't do this, the effect of levying this tax will be to drive up the cost when buying from that company. Since their price is already artificially low and anti-competitive, this is not a bug, it is a feature. Consumers will then have a choice of places to buy from, rather than have one entity undercutting everyone else by 20% and driving them out of business.

[Anonymous Coward]

I wouldn't mind a 2% tax bill.... these are the richest companies on earth - with some of the worst record on treatment of staff and the lowest tax contributions in history. I have zero sympathy for them or the banks - yes they need to be profitable - no they don't need to be allowed to destroy the competition through unfair advantage. Hopefully Trump's trade war will kick the EU up the arse to finally crack down on the tech giants.

[David Nash]

Targeting specific companies

Is that allowed?

When Ireland got done by the EU for targeting specific companies for tax breaks, it was bad. Are France allowed to target specific companies for extra taxes?

Or will it apply to all companies? I suppose where turnover>X where X=min(Google, Facebook, Amazon...)

[DavCrav]

Re: Targeting specific companies

"Targeting specific companies. Is that allowed?

When Ireland got done by the EU for targeting specific companies for tax breaks, it was bad. Are France allowed to target specific companies for extra taxes?

Or will it apply to all companies? I suppose where turnover>X where X=min(Google, Facebook, Amazon...)"

I'm sure you can write a law that catches a specific couple of companies. Foreign-domiciled, high-value, pay very little tax currently, etc.. Do the same as when people want to nobble a job vacancy, and write a set of crtieria so specific that only your candidate qualifies.

[Anonymous Coward]

eat the rich

all well and good but jonny taxman is shit scared of offending anyone in a fancier office than themselves as they mainly worry about their next job.

We need immense dunderheads collecting revenue out of jealousy and spite to get a fair wedge off these glass bumping clowns

[IGnatius T Foobar]

It's not enough

It's not enough. Abusive monopolies (or oligopolies) need to be taxed out of their monopoly positions.

[inmypjs]

"all use legal-but-cynical ways"

"Cynicism is an attitude or state of mind characterized by a general distrust of others' motives".

WTF is a cynical way to avoid tax?

[Jove]

An EU Tax rather than one administered by the nations? And how long would it only stay at 2%?

That would set a precedent that Ireland will want to avoid; - Junker and France are going to eat your bread and butter.

[G R Goslin]

Who pays the tax?

All this is a bit academic. It misses the point entirely, that it is the CUSTOMER that pays the tax, not the seller. If Amazon is dodging paying tax, their selling price reflects, at least, in part, that reduction. Everyone wants to pay less tax, and everyone wants that shortfall to be paid by someone else. Preferably by someone in another country. Governments are greedy for tax, and their record shows that spending that tax is seldom efficient. What we need is LESS tax and more sensible spending. Not that we're ever likely to see it.

[Boothy]

Re: Who pays the tax?

You seem to be the one missing the point.

The main issue here is Amazon etc, due to their current legal, but unethical tax payments, can undercut their competitors, basically trying to become a monopoly by forcing competition out, by unfair means.

Adding this tax, is about trying to level the playing field again. So yes, prices could well go up a little for the consumer, but that's only because consumers have been underpaying till now.

Companies like Amazon have effectively been using what should have been paid as tax, as a subsidy to keep prices artificially low.

Plus the companies impacted, could chose to absorb the tax themselves, and not pass it on the the consumers, time will tell.

[Anonymous Coward]

Re: Who pays the tax?

But who benefits from the low prices - you do - that is, the consumer does.

What you appear to be saying is that Amazon should have raised its prices significantly, made a big profit, and paid lots of taxes on that profit. So, who pays the higher prices that would fuel that profit so taxes could be paid ? You !

So why not cut out the middleman and just take more from the consumer ? Raise personal tax rates and reduce allowances, that way you'll directly capture the same money only you'd be honest about it.

[LucreLout]

Re: Who pays the tax?

due to their current legal, but unethical tax payments

Unethical according to whose ethics? Yours, or mine?

Some people have strong ethical concerns about paying tax because it gets spent on the military. Some people have strong ethical concerns about paying tax because it gets spent on welfare. Some people have strong ethical concerns about paying tax because it gets spent inefficiently.

Sorry, but you simply cannot bring ethics into law without first understanding whose ethical judgement will be given primacy. Your ethical framework is no more valuable to me than mine is to you. Hopefully you see the problem?

[Anonymous Coward]

Re: Who pays the tax?

Why the hell is this downticked, it';s the clearest simple statement of what the issue is.

People pay taxes ! Why do so many think that companies are some kind of magic money well - really it comes down to a simple thing - GREED. Ya'll want someone else to do the work so you can benefit. Standard human behaviour I guess.

[Griffo]

Simple

Just implement a transactional tax system. Companies lose the ability avoid taxation as they shift money around.

[Anonymous Coward]

Love the Tax, Screw the EU

Perversely, I love this new tax. The more the merrier.

We're still very far from the "ideal" tax level where 100% of everyone's income is controlled by the State. Euro slaves still get to keep way too much of their income which makes these tax optimization strategies possible.

Only when EU has the ability to redistribute every penny or cent you make will we have a just society.

[Winkypop]

Sign me up for 2% tax

Hell, I'll pay 4% !!

[hoola]

Not the whole problem

This still does not address the underlying nub of the problem that of the four Amazon is the worst. There is so much avoidance of VAT that UK based retailers are absolutely stuffed. There have a 20% disadvantage from the word go, that then coupled with the fact Amazon pay sod all corporate tax leaves them with nowhere to go. If these taxes are used to fund rate reductions for real businesses then there may be some benefit but that will not be the case.

In a recent BBC item about the Toys R Us failure in the UK, various members of the public all stated that they bought online. If they are buying online from genuine retailers, not commission-grubbing, tax-avoiding monoliths then there would not the be current failures. Unfortunately they are mostly buying from Amazon and eBay from Far-Eastern commercial enterprises that send everything as gifts or minimal value. This allows them the 20% price advantage.

Equally where appear to have the stupid situation where property rents and rates keep increasing, forcing business out. The landlords then appear to still be able to make money on empty premises. The entire situation round retail/online taxes at all stages of the chain is fundamentally broken but no politician will have the balls to do anything about it.

[Jim84]

Re: Not the whole problem

A Land Value Tax (NOT property value tax) could resolve all these problems:

https://www.economist.com/blogs/freeexchange/2015/04/land-value-tax

Amazon and Google are just network effect monopolists much like landlords are location oligopolists. They are just adding insult to injury by massaging their profits away to zero tax countries.

A tax on inputs such as labour avoids this profit manipulation, a tax on land doesn't carry the dead weight loss of a tax on labor because landlords cannot respond by reducing the supply of land.

Google can try and avoid using land in the UK, but the suppliers of goods and services that google uses in the UK, as well as customers of their online service (advertisers and consumers) do have to use land.

"Most taxes do not just depress economic activity; they also displace it—for example to offshore financial centres. The faster that tax collectors crack down on loopholes, the more clever accountants find new ones.

Land-value taxes, on the other hand, lack these perverse effects. They cannot reduce the supply of land, or distort decisionmaking. Instead they may even stimulate economic activity, by penalising those who hoard land and keep it idle (a big plus in desolate post-industrial cities where much land is vacant). The tax drives the land price down by the capitalised value of the future levies—theoretically even to zero—until someone finds a use for the land. Collection is cheap. Unlike profit, you cannot massage land away or move it to Luxembourg. If you do not pay, it can be seized and sold. Though nobody likes extra taxes, new land-value levies could be matched by cuts in other taxes, especially those paid by poor people."

[darkl]

It will be consumers/customers who will be paying all the "special tax" anyway. All Google, Apple, Facebook, Amazon will do is increases prices of their products or services. They never pay the taxes from their own pockets, why would they when consumers/customers paying all the taxes for them seemingly without even realizing. So in a nutshell not only you are paying taxes of your own property/house, but also the taxes of all the corporations you buy products or services from.