back to article When it comes to taxing tech giants, America is out, France is in, Canada and Indonesia are going their own way

Like it or not, tech giants are all going to face sizable tax bills starting next year. Probably. After decades of creative accounting, offshore tax havens and special government deals, the world seems to have decided that 2021 is the year Google, Facebook, Amazon, Twitter et al will have to cough up their fair share of taxes …

  1. LDS Silver badge

    With Covid emptying States' coffers, and those companies seeing increasing revenues....

    .... it's quite clear politicians can no longer allow them to shuffle money around until they disappear.

    Fiscal revenues will decrease, and trying to raise taxes on people and local companies already hit by the situation won't be wise.

    1. Phil O'Sophical Silver badge

      Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

      trying to raise taxes on people and local companies already hit by the situation won't be wise.

      Those are the people, who'll get hit anyway. If France decides to tax Amazon at 2%, who do you think will end up paying, Amazon customers or Amazon shareholders?

      1. Anonymous Coward
        Anonymous Coward

        Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

        If Amazon could get away with increasing its prices by 2%, it would do so anyway - they're not a charity.

        1. Steve Davies 3 Silver badge
          Childcatcher

          Re: increasing its prices by 2%

          only 2%?

          More like 15%. The other 13% is for shipping and handling and currency conversions. Bezos can't have his margins slipping now can he eh?

        2. SundogUK Silver badge

          Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

          Like any business, Amazon is trying to maximize current and future profit. Pricing is one element of that calculation but not the only one. The problem with taxes is that they shift the entire calculation and businesses will almost always shift that on again.

        3. zuckzuckgo Bronze badge

          Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

          Part of Amazon's competitive advantage over local suppliers is they pay less in local taxes. So if Amazon raises prices to cover taxes that gives local suppliers a better chance to compete.

      2. Anonymous Coward
        Anonymous Coward

        Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

        Well, that's going to depend. With every customer base, there is a breaking point where the customer goes, "That's Too Much!" and walks away. With both customers and shareholders, a company needs to be careful not to hit that point, and the question becomes, "How Much is Too Much?"

      3. Doctor Syntax Silver badge

        Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

        "who do you think will end up paying, Amazon customers or Amazon shareholders?"

        In the first case who do you think the customers will blame, Amazon or government?

        In the second, how many Amazon shareholders vote in French elections?

        1. Phil O'Sophical Silver badge

          Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

          In the first case who do you think the customers will blame, Amazon or government?

          Oh, when the order has:

          Total xxx

          VAT yyy

          2% GAFA tax zzz

          I think they'll know exactly who to blame.

          1. LDS Silver badge
            Facepalm

            Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

            They have to show VAT because that's paid by the customer, not the company. Do you see in invoices a breakdown of all the taxes a company pays in their invoices?

            If they try such a trick, as a government I would make compulsory to show in every invoice how much taxes they pay on profits now...

        2. zuckzuckgo Bronze badge

          Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

          You don't have to be an Amazon customer. If the price is to high look for another, maybe even local, retailer.

      4. LDS Silver badge

        Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

        It doesn't work simply this way. Amazon can of course raise prices (in turn it will also pay more taxes) - but that could make customer not buying, or buy elsewhere, maybe locally, so most of the money are not routed to some tax haven, and never returned back to the economy.

        Anyway, because they now don't pay almost anything, it's still taxes coming from Amazon which now are never paid despite the profits, and funneled outside the country, while customers are already creating those profits while sustaining all the burden of the taxes.

        Amazon business model is built on avoiding taxes and exploiting workers. Let's see if it can keep on working without.

      5. jmch Silver badge

        Re: With Covid emptying States' coffers, and those companies seeing increasing revenues....

        "Those are the people, who'll get hit anyway."

        Yes and no. If Amazon is forced to raise prices that it has kept artificially low due to tax avoidance, the consumer might get a better deal from a local supplier, and money spent locally will increase their overall standard of living in the community.

        Money spent on amazon just disappears overseas. It's of course a lot more complex than can be explained in 2 sentences but overall I believe on balance it's better for the consumer that the tax is applied

  2. DavCrav Silver badge

    "Meanwhile, Indonesia has also seen an opportunity, and said that it will now start collecting a 10 per cent tax that it introduced in the middle of 2020. Previously it said that it would hold off collecting the levy until there was a global agreement. France has said pretty much the same thing: it will end its tax when global consensus is reached."

    Those two things are actually the opposite of each other, not similar.

  3. Tigra 07
    Coat

    "The calculus, of course, is that President Joe Biden won’t be willing to resort to Trump’s tit-for-tat tariffs as a way of throwing his weight around. "

    Not unless someone starts investigating his son for corruption at least...

    1. Anonymous Coward
      Anonymous Coward

      Are you a Newsmax, or an OAN fan?

    2. sabroni Silver badge

      re: Not unless someone starts investigating his son for corruption at least...

      I WON THAT INVESTIGATION! BY A LOT!!!!!!!

    3. DS999 Silver badge

      Trump's butt buddy Bill Barr ordered the US attorney's office in Utah to open an investigation into him over a year ago. If they had found ANYTHING they had a chance of making stick, you can be sure Barr would have pulled a Comey and announced it a week before the election.

      That's the problem with the extreme right wing media bubble so many Trump supporters live exclusively in. They believe "alternative facts" like Biden's son is super corrupt, Trump is pure as the driven snow, and Biden stole the election with help from a dictator who has been dead for six years and widespread fraud in a county (Edison) in Michigan that does not exist. That's why when these things go before a judge, or through US attorney's offices, they never go anywhere - because unlike on Newsmax or Rush Limbaugh's show, you have to have REAL facts, not right wing "alternative facts".

      1. Mark Exclamation Bronze badge
        Joke

        But Edison in Michigan DOES exist....!

  4. Doctor Syntax Silver badge

    Global consensus might simply amount to everyone except the US.

  5. Mike 137 Silver badge

    Conceptually not bad but ...

    While there's no international consensus and uniformity, this is not going to work as well as it might. The disparities of approach will still allow jurisdiction shifting by the canny accountants of the mega-corps. What's really needed is a uniform approach so there's nowhere it's advantageous to shift to, but that would need two things that are probably not achievable:

    [1] All countries to implement the same rules

    [2] All countries to agree to set the same rates

    Unfortunately, as was found out in Ireland, national commercial advantage will always come first.

    It's the same problem as faces cyber security. Hence the 2016 "US Commission on Enhancing National Cybersecurity (Presidential Executive Order 13718)". As a practicing cyber security professional I'm not at all sure how it can be "national" considering how interconnected all countries are.

    The bottom line is that the economic prosperity of nations is to a certain extent inevitably a zero sum game played by countries against each other. The transnational behemoths, not surprisingly, take advantage of this.

    1. SundogUK Silver badge

      Re: Conceptually not bad but ...

      "Fortunately, as was found out in Ireland, national commercial advantage will always come first."

      FIFY.

      1. LDS Silver badge

        Re: Conceptually not bad but ...

        Sure, we could kick Ireland out of EU and let them bomb each other until only sheeps live there... and then let's see how compelling for Apple & C. have their HQ in a country of 5M people who can't export anywhere... same for Luxembourg, of course - but the bombing, maybe.

        1. Lars Silver badge
          Happy

          Re: Conceptually not bad but ...

          "we could kick Ireland out of EU".

          No, only the Irish could do that, nobody else. EU countries are independent.

          Nobody is forced to join or forced to stay.

          1. LDS Silver badge

            Re: Conceptually not bad but ...

            If some countries believe they can only take advantage of EU market while creating the very situation that will cause that market to not work, one day EU will change, a new smaller organization will take the place of the older one, and some countries will be kicked out. Rules can be always changed.

            As the situation worsens what could have been barely acceptable before may no longer be. Small countries believing they could be tax havens to extract wealth from larger ones may find the game can work no longer.

        2. Anonymous Coward
          Anonymous Coward

          Re: Conceptually not bad but ...

          @LDS

          Sheeps. SHEEPS?

          Cheers… Ishy

          1. DishonestQuill

            Re: Conceptually not bad but ...

            Especially odd choice of words, especially as the gobsheens that would set about bombing each other could very accurately be described as sheeple.

    2. SundogUK Silver badge

      Re: Conceptually not bad but ...

      "The bottom line is that the economic prosperity of nations is to a certain extent inevitably a zero sum game played by countries against each other."

      No it isn't.

      1. Anonymous Coward
        Anonymous Coward

        Re: Conceptually not bad but ...

        Yes it is.

        Any profits you make are money you took from your clients, money they won't spend on other things. Wealth, like energy, is finite, you can shuffle it around, but what you spend in A can't also be spent in B.

        Anyone saying otherwise is a naive utopian, of those who thought robots would do our work so we can have a leisurely life of pleasure and luxury. But never pondered why somebody would want to pay for your leisurely life of pleasure and luxury, when he could put the robots' profit in his own pockets.

        1. mevets Bronze badge

          Re: Conceptually not bad but ...

          There are ways around the zero sum.

          While not free, as in air, digging something out of the ground provides the ability to create wealth rather than exchanging it. Limiting that is the economy does not wait for you to dig it out, rather re-establishes its gross value once it is discovered. A bit like schroedingers cat in that way; perhaps quantum economics will be the next prevailing theory.

          Another is economic warfare via stagflation. Suppose you find your adversary has a weakness, like an insatiable desire for opioids. By selling this precious substance, you not only get money you can spend on non-destructive things like ipads (oh, wait...), you also harm their productivity, thus lowering the price of ipads. This was of course done for tea & spices a century ago, and may be happening currently again for ipads.

          1. Anonymous Coward
            Anonymous Coward

            Re: Conceptually not bad but ...

            digging something out of the ground provides the ability to create wealth rather than exchanging it

            No, the amount of stuff buried in the ground is finite, and while it is true that we haven't found it all yet, this doesn't mean that we will keep discovering more indefinitely. Earth is big but has a finite mass, so my point stays, the total amount of wealth on Earth can't be anything but finite.

        2. jmch Silver badge

          Re: Conceptually not bad but ...

          "Wealth, like energy, is finite, you can shuffle it around, but what you spend in A can't also be spent in B."

          Incorrect. Wealth is simply a representation of value. If a company invents an incredible new widget and its market value doubles, that's not fake wealth, it is a real representation of the value that the new widget will have on the lives of others. When an author writes a book, the value created is real. Every creative endeavor is, almost literally, creating value, and therefore wealth, out of thin air.

          Saying that what's spent on A cannot be spent on B is true but irrelevant, because that's describing a value transfer not a value creation. The seller of A is going to spend what he obtained for selling A, that wealth can circulate back to the original spender when they themselves provide something of value.

          Therefore global overall wealth is always increasing as long as people are creating value more quickly than it is destroyed (through breakage, wear and tear etc).

          1. Anonymous Coward
            Anonymous Coward

            Re: Conceptually not bad but ...

            Wealth is simply a representation of value

            No, your "incredible new widget" has a subjective value to some people: Some simply must have an iThing, others don't really care. If nobody cares (gone out of fashion), it's worthless. Value is a subjective unit which only translates to wealth when you use actual wealth to buy subjective value.

            There is always value transfer, never value creation. The wealth apparently created out of thin air (called "profit"), is not created out of thin air; It is wealth people have lost in exchange for their new iThing. The total sum of wealth is still the same.

            To push it to the extremes: Stealing would seem to be a creation of wealth out of nothing. Well yes, but only for one party, the other loses the exact amount you've gained, what a coincidence. It only seems creation because one usually doesn't care for the other party.

            1. zuckzuckgo Bronze badge

              Re: Conceptually not bad but ...

              > No, your "incredible new widget" has a subjective value

              All economic value is subjective.

              If the new widget turns sunlight into usable power for lower cost then current technology then the world now has more power available for the same resource use. If a widget improves the energy/resource efficiency of car travel then the world can travel more miles. If better methods or devices are found for food production then there will be more food available.

              If wealth/value was a zero sum game then we would get poorer as the population grows. By that logic we are 20 times poorer then the people living 1000 years ago.

              1. Anonymous Coward
                Anonymous Coward

                Re: Conceptually not bad but ...

                By that logic we are 20 times poorer then the people living 1000 years ago

                There is "potential" wealth, the most obvious example being undiscovered minerals. (Sunlight does also belong to that category BTW: It's just a resource we haven't (seriously) tapped into yet.)

                So the overall wealth on Earth is about the same as 1000 years ago, its distribution and ownership have slightly changed, and some of it has been indeed "spent": For instance a big part of the oil which existed 1000 years ago has been used, and since it's not renewable, it's gone, gone like put in a rocket and shot into the sun. We are indeed a little poorer than 1000 years ago, there is no denying it.

                1. zuckzuckgo Bronze badge

                  Re: Conceptually not bad but ...

                  I can't eat or drive potential wealth. The processes of growing and distributing food takes something of low economic value - raw resources - and through human labour and technology turns them into something of great value, food that keeps me alive. The value to me - or other humans - is what matters in economic terms.

                  And you don't have to limit "potential" wealth to earth bound resources, we may find ways to mine asteroids, to colonize Mars or other planetary systems. So "potential" wealth is only limited by the technology we have to access those resources.

                  The economy is a purely human construct. When it runs efficiently it turns lower value resources into higher human-valued items. So technology and manufacturing are by definition adding value to the economy.

                  1. Charles 9 Silver badge

                    Re: Conceptually not bad but ...

                    They were still there to begin with. Wealth is based on matter, which physics dictates can never be created, merely found. Concentration of resource is merely a technique, just like exploitation. Consider aluminum in the 19th century. It was once so difficult to smelt that it was considered a precious metal like silver...then electric smelting came along and it's now a pretty common metal (not at the copper or iron level, but still common enough it's used everyday in things like rolls of foil).

                    PS. Even extraterrestrial wealth is finite because the universe is finite.

                    1. zuckzuckgo Bronze badge

                      Re: Conceptually not bad but ...

                      What units would you use to measure "potential wealth"? You seem to be defining potential wealth as all the energy (include the mass-energy) in the accessible universe. Scientifically interesting but economically irrelevant in making decisions about taxing Amazon and other multinationals today.

                      Economics is founded on the principle that human activity can create or destroy value. It is the study of human behaviour and how we value the things we use and trade. Value, in that context, is whatever we as humans perceive it to be. If our perceptions favour to many frivolous trinkets over say the environment, food production and health then we risk regressing back to the stone age. How and when we tax companies or individuals affects economic behaviour, total economic wealth and to whom those benefits flow.

                      Over and out.

                      1. Anonymous Coward
                        Anonymous Coward

                        Re: Conceptually not bad but ...

                        Scientifically interesting but economically irrelevant in making decisions

                        Agree, I was talking generally. The taxation problem is not an economic one, it is a legislative one, and can only be solved by legislators.

                        human activity can create or destroy value

                        That's the human perception layer, which is virtual and mostly illogical, as the various speculative bubbles over the ages (starting 1637!) tend to prove. "Value" is so subjective it is almost meaningless, the majority of scams are based on the fact you can't really assess "value". Does a cash-burning startup producing nothing and having no profits whatsoever create "value"? Well, it does for those receiving the money funneled into it, but certainly does not for the majority of investors who will lose money when the stockholder pyramid scheme collapses. Result: Existing money just changed hands.

                        (Now of course you can point out that the simple fact that the money circulated was beneficial to the economy at large, except that this money would have circulated anyway: Investors invest, so that money would had certainly been spent on some other enterprise.)

                  2. Anonymous Coward
                    Anonymous Coward

                    Re: Conceptually not bad but ...

                    I can't eat or drive potential wealth

                    Nobody said you could. Wealth is potential, it allows you to do things. Even for your "growing food" example you have requirements: Seeds, agricultural surfaces, water, workforce, and finally transport and storage. If one of those is missing, you simply can't grow crops (for instance).

                    As for limiting wealth to Earth, you're right on a theoretical level, but we actually are restricted to Earth (so far), everything else is still Science Fiction. And of course, as Charles already said, asteroid resources are finite too.

                    You have to let go of the common, and very human way of thinking that amounts big enough equal infinity.

                    it turns lower value resources into higher human-valued items

                    There is that subjective value bias again. The objective (real) value of an iThing (to stay with that example) is simply the sum of its materials and the work put into making it (designing it, refining materials, assembling, transporting to the point of sale). I don't deny it has huge sentimental value for iThing fans, but so had some seashells to primitive civilization, would you count them as having added value to the global economy?

                    1. zuckzuckgo Bronze badge

                      Re: Conceptually not bad but ...

                      Economics is a science of human behaviour and perception it is not physics. Value is based on what you are willing to trade something for. A $100 bill is very low in mass and energy but I can trade it for 2 cubic yards of soil - very high in mass and energy.

                      If you have a 2020 iThing are you willing to trade it for a collection of the raw materials it is made of?

  6. mark l 2 Silver badge

    Amazon just added an additional 2% fees to the 3rd party sellers in the UK that use Amazon to sell their goods, and so through the backdoor lots of small companies with turnovers ways lower than the threshold are now paying this 2% tax for Amazon. So once again its clear that Amazon will do whatever it takes to reduce their tax liability, as they know since the pandemic no amount of bad publicity it stopping people from using them

    1. IGotOut Silver badge

      Not really.

      If you levy a tax where shops can compete, then they may find they have to absorb some of the costs.

    2. David Pearce

      The location of the buyer is what matters. The idea is to level the playing field a bit between UK based sellers who already have to pay UK taxes and those logically in low earth orbit in the Amazon Cloud

  7. Graham Cunningham

    I am sure it is too simplistic, but mandating a minimum tax bill as a percentage of turnover, not profit, in each jurisdiction would seem to reduce the ability to game the cost structure to make the 'profits' appear in a tax haven.

    1. alain williams Silver badge

      Fair taxation

      minimum tax bill as a percentage of turnover, not profit

      I wish it were that simple. There are many businesses where profit is genuinely very low, either because there is very low markup or their costs are large. The trouble is how to codify in tax law ways of artificial costs - it is easy to see what they are but hard to codify in a way that a smart tax accountant cannot evade.

      All the way from shifting profits to Ireland (Microsoft, Google, ...), to inflated royalty fees to subsidiaries in lower tax countries (Starbucks & more), to the business being owned by your wife who lives in Monaco (Philip Green)

    2. tyrfing

      So how do you tax fairly both grocery stores (large turnover, low margin) and jewelers (small turnover, large margins)?

      1. Tigra 07
        Pint

        RE: tyrfing

        With VAT.

        Person A won't pay much buying vegetables, but Person B is buying Rolex watches and cars, and will pay lots of tax for their lifestyle. As an added benefit there's no VAT on certain essentials.

    3. SundogUK Silver badge

      It is too simple. If you have a revenue of 1 Bn but a profit of 1 M, a 10 % tax will kill you.

    4. aks

      A tax on turnover is pretty much what VAT does.

    5. veti Silver badge

      "Turnover" implies spending. Twice. A customer pays money to the company, and the company pays it to a supplier or employee or whatever.

      Each of these transactions is already taxed.

      "Profits" are different in that they're *not* spent, and so the second tax opportunity doesn't arise.

  8. Potemkine! Silver badge

    The logic would say that if you do business here, you pay tax here like anybody else, like any SME for instance. Closing the loopholes enabling multinational companies to do creative accounting could be more efficient than a dedicated tax, but it seems that the 'lobbying' (in other words 'corruption') made by these companies towards lawmakers forbids that option. It enables those megacorps to practice unfair competition to the detriment of small businesses, and their bosses to get richer and richer every year.

    1. Phil O'Sophical Silver badge

      The logic would say that if you do business here, you pay tax here

      The problem is in the definition of "here".

      The EU would like "here" to be defined as "the EU", but its members all have different tax codes. A true fiscal union, which is what the Eurozone implies, would have a single set of tax laws for the whole zone, but the EU members will never agree to that. An alternative would be to treat each country as a separate place to do business, but that goes against the ethos of the union. Since there is no chance of actually fixing the situation, they rely on ever-more complex meta-rules to plug loopholes, and tax lawyers find ever-more sophisticated loopholes. It's an unwinnable arms race.

      The same thing happens to an extent in the US, where states have flexibilty to set tax codes.

      1. Lars Silver badge
        Happy

        "The EU would like "here" to be defined as "the EU"".

        That is a bit silly, it's like claiming the EU is a country, companies do not pay taxes to the EU.

        (they can be fined by the EU).

        And "the ethos of the union" is the ethos of the member states that they agree on together.

    2. jmch Silver badge

      The main way big corporations massage their tax liability is by inflated or fake spending between different local branches of the same corporation. So impose 2 rules:

      1) ultimate beneficial ownership of all companies to be public

      2) costs between companies who have more than a certain %age common ownership cannot be considered as costs for tax purposes. Costs to companies whose UBO is unknown ditto.

      All intercompany costs should net to zero

      1. Charles 9 Silver badge

        "The main way big corporations massage their tax liability is by inflated or fake spending between different local branches of the same corporation."

        Impose conditions and their lawyers (who tend to be better paid than government lawyers) will invent shell games and other tricks to produce degrees of separation to hide the links between companies. Just look at how the GDPR is doing right now. We still haven't seen a single big hit against violations as of yet. Three guesses why.

  9. Andy The Hat Silver badge

    How does it work?

    The problem as I see it is reflected in an order (that is running stupidly late!).

    I order a thing from Amazon UK, it is fulfilled by Amazon Eu sarl, the "in stock" goods are "received" in Marseille (from where I don.t know, they were in stock). It is then dispatched from "Provence-Alpes-Côte d'Azur" (which I believe is also Marseilles) and sent somewhere ... It's currenlty in the aether ...

    Who does the UK Government tax? Amazon UK obviously ... except Amazon UK made no profit out of the transaction (in fact it made a loss after paying Amazon Luxembourg it's seller IP and warehouse distribution royalties and purchase from Amazon EU). So Amazon UK pays no tax but France can obviously tax Amazon EU ... unless the goods were sourced from Amazon.br and Marseille is a WHO freeport and the goods are coming "into the country" via a WHO freeport in which case the tax will only be applied if the purchase actually crossed the border rather than being shunted around in the French dock ... But of course Amazon EU paid Amazon.someone for IP rights etc and didn't make a profit which means France can't get tax ... But if tax isn't being sought by France maybe the US will ... oh no because the funds never crossed the US border but are sitting in the Cayman Islands the US can't get their paws on it either ... here we go again.

    If the Governments impose a 2% turnover tax (for instance) rather than trying to chase the tails of the profit then Amazon will run to the WHO and claim poverty and unfair treatment compared to other multinationals who do pay tax through their profits and, probably rightly so, the WHO will concur.

    The tax system is a complete mess. The holes were baked in to allow tax avoidance by the super rich and it's now biting the arses of the politicians who always profited from the system who on the one hand don't want to close the loopholes but on the other hand want to be seen to get their fair share of tax money.

    In the long run all this "we're going to tax" is crap and won't happen unless the companies decide to do a deal which suits *them* as they can use the tax avoidance system better than those who built it.

    1. Anonymous Coward
      Anonymous Coward

      Re: How does it work?

      Perhaps the good move would be to decide that intra-company fees, whatever their nature, are NOT deductible from the benefices...

  10. naive Silver badge

    Breaking News: Biden will start taxing Big Tech after their massive support for his campaign

    The gratitude of Sleepy Joe will address Amazon with specially high rates for all the fake news in the Washington Post, Twitter will get a 10% extra hike for flagging President Trump his tweets, Facebook and Google will be punished with 30% tax hikes for manipulating search results in such a manner that conservative content is hard to find.

    Heaven we be upon us, soon we be swimming in that juicy Google money which the savior sleepy Joe manages to extract from those evil companies.

    1. Yet Another Anonymous coward Silver badge

      Re: Breaking News: Biden will start taxing Big Tech after their massive support for his campaign

      Medical care for 70year old obese drug addicts is expensive and the government will have to pay that for prisoners

  11. Mark Exclamation Bronze badge

    Fair's fair.....

    Make sure they also tax the Chinese Techs, such as Tencent, Alibaba, Baidu, ByteDance etc.

    1. veti Silver badge

      Re: Fair's fair.....

      Just as soon as they start doing large volumes of business in these countries, sure.

  12. jmch Silver badge

    "how to do cross-border taxes for digital companies that largely exist outside of borders."

    My 2 cents... Governments should just deem a minimum tax based on client-side revenues, just a fraction of a percent, maybe 0.2-0.5%. Then companies pay whichever is greater between that and what they pay currently.

    If companies threaten to withdraw from a country, the answer should be "don't let the door hit you on the way out". Reality is that, bluster aside, no big multinational would voluntarily exit a large and lucrative market. They are either loss-leading to undercut and destroy any competition, or they have already nuked the competition and are raking it in. So just call their bluff, because it really is nothing but bluff.

    1. Justin Clements

      Except

      The problem is that if companies like Google roll themselves back into just a US operation, and a UK customer wants to buy ad space the customer is the one doing business in the US, and the UK taxing authority has any say over that US corporation. Of course it could fine the US company, but no court in the US is about to uphold such a fine.

      Now if Biden were to allow a foreign company to tax a US entity within the US on it's global profits - where do you think this ends? Will the IRS now chase Airbus for a percentage of it's profits of sales in the US? How about Mercedes being charged a percentage of it's profits? Or VW? Or will this be one sided where only US companies get charged?

  13. StrangerHereMyself Bronze badge

    Utter ruin

    These taxations will spell economic disaster since it will lead to countries taxing companies not legally situated there. If this goes through and expands it could lead to a Depression worse than the one we had in the 1930's.

    Imagine that all nations start taxing foreign companies several percent of their REVENUE. Note that there are 200 nations in the world and if each of them taxes Facebook or Renault 2 or 3% they'd be taxed for 400% of their revenue! How long do you imagine that such a company will remain in business? Not very long I can assure you.

    Countries like France are motivated by nothing but blind hate and envy and will end up ruining the economic prospects for both France and the rest of the world.

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