back to article US backs down from slapping import taxes on French goods over Macron's web giant tax

The US government has decided against slapping import tariffs on French products, which would have been in retaliation to France taxing tech giants three per cent of online service revenues in the Euro nation. “The US Trade Representative has determined to suspend the tariff action in the Section 301 investigation of France’s …

  1. Grease Monkey Silver badge

    Unfair?

    So paying taxes on the money you make is unfair now?

    And the way to counter that is to impose taxes. Taxes which must be unfair.

    Two wrongs don't make a right.

    The odd thing is that the US government themselves seem to be cracking down on these same companies. So my reading of this would be that they don't want these companies paying the tax they owe abroad because that in turn might mean that their earnings drop and the opportunities to tax them in the US would be reduced.

    1. LDS Silver badge
      Devil

      "and the opportunities to tax them in the US would be reduced."

      "and the opportunities to be lobbied NOT TO TAX them in the US would be reduced".

    2. fidodogbreath Silver badge

      Re: Unfair?

      So paying taxes on the money you make is unfair now?

      Only for rich people and corporations. Regular schlubs are sent to prison if we don't pay.

    3. Doctor Syntax Silver badge

      Re: Unfair?

      Maybe it's dawning on them that (a) a tit-for-tat tariff war maybe isn't good and easy to win when they see themselves having to take on more and more countries to whom they wish to sell stuff and (b) they might get a better tax take from their own coporations if they can negotiate an end to the free market in corporation tax at the expense of letting customer countries take a percentage on sales.

    4. doublelayer Silver badge

      Re: Unfair?

      "So paying taxes on the money you make is unfair now?"

      The American argument is essentially that it's legal for other countries to set tax laws that apply to everybody, including adjusting them to charge more for large companies, but that France's law is targeted specifically at them. The argument would therefore be that France should change its general tax legislation to remove the loopholes that result in a lower tax payment from the companies concerned, rather than creating a new type of tax which has limits placed on it such that only a specific set of companies have to pay it. I'm not saying this argument is a good one, but it is what they're using, and the current trade rules appear to at least somewhat support them; basically every company which qualifies for the digital services tax are American, and it can be argued it's effectively an anti-American tariff.

      The suggestion to implement taxes of this type by simplifying tax law so it's harder to avoid is a persuasive one, though politicians rarely want to go to that effort. In my opinion, such modification is better than a tech-tax whether you subscribe to the U.S. argument or not. The reason is that a sector-specific tax doesn't fix the problem for any other company which is avoiding paying its tax in a method the citizens dislike, so if the avoidance problem can be resolved by making it harder to avoid, it is likely to increase tax payments across the board without needing frequent patches to target particular offenders.

    5. John Brown (no body) Silver badge

      Re: Unfair?

      "cracking down on these same companies."

      Yes, bur are they the same companies? For US tax purposes, Google Ireland is NOT Google USA. Microsoft Ireland is NOT Microsoft USA etc etc etc. The big multinationals take advantage of various jurisdictions to move their profits around to minimise their tax liabilities. The world is slowly but surely catching up with those shenanigans. If Google US wants to pull all it's world wide national subsidiaries under one single Google USA banner, then they might have some sway with persuading the US government to help out on this. But they won't, because they don't want to be taxed in the US either. Likewise, what has the US government and their IRS got to do with how Google France is being taxed in France?

  2. Rol

    Level playing field?

    I can't understand why, when I buy some tobacco from the corner shop, my debit card transaction isn't processed in the Cayman Islands, and therefore free of any local taxes?

    It's the exact same style of transaction as is done by many internet traders - forget where the customer lives, forget where the warehouse is based, forget where the goods or services are used, and focus solely on where in the world the customer's payment gets sucked up into your organisation.

    It's a pity the "Do it like Google" experiment run in the quaint Welsh town of Crickhowell, where the local traders set out to offshore their sales, didn't go international, as that would have definitely pushed the treasuries of every nation on Earth into some concerted response, that also reined in the big players from this dubious tax avoidance scheme.

    I think it's about time the BBC revisited Crickhowell with a follow-up piece.

    And by the way, the townsfolk were not grubby tax dodging thieves, they did it to demonstrate how unjust the tax system was.

    1. Version 1.0 Silver badge
      Happy

      Re: Level playing field?

      "the townsfolk were not grubby tax dodging thieves, they did it to demonstrate how unjust..." - That's typical Wales for you, the majority of the Welsh are far more interested in doing "good" things than being idiots.

    2. DavCrav

      Re: Level playing field?

      "And by the way, the townsfolk were not grubby tax dodging thieves, they did it to demonstrate how unjust the tax system was."

      They actually decided they didn't fancy the hassle, and abandoned the idea.

      Which is fair enough, I can see that as well. They might get jailed for tax evasion, whereas Starbucks gets a sweetheart deal with HMRC.

  3. Trigun
    Flame

    The existing system of companies only paying tax in one juristiction (to simply trade) just doesn't work when you are dealing with multi-national mega corps.

    All they do is find the country with the lowest tax rate and set up shop there and pay a big fat 0 into the countries they trade in: Take money, pay nothing back in taxes, murder the local competition because they cannot compete because they have to pay a higher tax rate.

    1. Yet Another Anonymous coward Silver badge

      Alternately tax the people taking the money from the corporations.

      Amazon can dodge all the corporate tax it likes, that money eventually flows to the shareholders - just tax those gains as regular income

      1. LDS Silver badge

        "just tax those gains as regular income"

        They have a slew of tricks available to make them not look like any kind of income, if needed. You'll have to tax them before they can make money "disappear". Small shareholders may not be able to use those tricks, but larger ones can.

      2. Doctor Syntax Silver badge

        The shareholders won't, on the whole, be in the jurisdiction where the customers are so it still represents and un-taxed flow of money from the latter.

        It will continue as long as there are multi-nationals and an international free market in corporation tax.

      3. Tom 7 Silver badge

        You're saying the the UK (say) should impose a tax on shareholders in the US?

    2. ratfox

      Arguably, it makes sense to let small companies pay tax in a single jurisdiction when it would be too costly for them to declare tax in multiple countries... But when anyway the corporation controls offices in every country of the world, and is paying tax there, much of this argument falls. I'm not entirely sure whether this was foreseen by the politicians who wrote the laws, or whether this was an unintended consequence. The world is often more complicated than we think, though; and when corporations can save billions in tax by changing the way they operate, it's no wonder that they try.

  4. hoola Silver badge

    And the wheel slowly turns

    At some point you would think that the authorities in the US might ask themselves the question "Why does everyone else want to impose a digital services tax on our corporations".

    That requires some intelligence and understanding of the problem. It it my understanding that the US has an equal problem with billions of dollars being kept offshore by the likes of Apple to avoid tax. Now in the eye of the US authorities that is clearly a very different problem to any other country trying to do something to level the playing fields so that the primarily US based (and usually tech) corporations actually pay tax at a fair rate in the countries where the revenue is taken.

    That countries like Ireland, Luxemburg and the Channel Islands with a very small state continue to provide major loopholes in tax mitigation (avoidance because ultimately that is what it is) are equally a major part of the problem.

    1. phogan99

      Re: And the wheel slowly turns

      Then just close the loophole and say all profit is taxable where it is earned. It means companies have to come up with a new way to dodge taxes and ends the U.S objection to having it's companies the sole targets for a new tax regime.

      1. David Hicklin

        Re: And the wheel slowly turns

        "Then just close the loophole and say all profit is taxable where it is earned"

        That's easy and it done now, just make the local company buy its good or services from an overseas one at such a high cost that it hardly makes any local profit.

        At least this tax is on sales - not the minuscule profit they make.

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