Monday, March 19th 2018
EU Plans to Add 3% Tax On Tech Giants' Revenue Based on Customers' Location
"Treat equally that which is equal, treat differently that which is different" seems to be the motto of the new EU proposal for increased taxation on tech giants. The proposal, which will be presented just this Wednesday (March 21st), could lead to increased taxation to tech giants that do business with EU customers by as much (or as little, depending on your point of view) as 3% of their gross revenue (the value still isn't final, but should stay within 1% and 5%). It isn't clear how the customer location business will be defined, but it seems that the EU believes its citizens provide increased revenues for companies than other citizens in other parts of the less developed world do.
This move specifically aims to capture real growth and value of digital-first companies, such as Facebook and Amazon. These are types of companies that the EU feels aren't being taxed proportionally (meaning, they currently provide less than they should to public coffers) to the true value they derive from the region. As most EU matters, any tax proposal will need the unanimous approval of all 28 current members before turning into law, so one country alone could block it.
Source:
Bloomberg
This move specifically aims to capture real growth and value of digital-first companies, such as Facebook and Amazon. These are types of companies that the EU feels aren't being taxed proportionally (meaning, they currently provide less than they should to public coffers) to the true value they derive from the region. As most EU matters, any tax proposal will need the unanimous approval of all 28 current members before turning into law, so one country alone could block it.
24 Comments on EU Plans to Add 3% Tax On Tech Giants' Revenue Based on Customers' Location
Was Amazon directly named? Most of their revenue comes from sales of physical goods. What's this going to mean for companies like Valve, GOG, and Netflix which are completely digital?
Instead of looking ways to rob more people of more money, maybe they should try to find a way to stop spending so much money so they don't have to collect it in the first place. If this measure passes, it's yet another step in the wrong direction for the EU.
Well how about corporations don't stash their $200 billion in Ireland, what's the excuse for not paying their fair share? As for the fair share, it's totally up to the EU (or US) as to how much they tax them.
It's always fascinating how EU vs US debate goes wrt taxation & corporate greed. That's not to say that people in other parts of the world like their overlords, but we also believe that corporations aren't nearly as goody two shoes that they're made out to be. In essence megacorps & govt are two sides of the same coin.
Rereading the OP, it sounds like it is a corporate income tax. In other words, the companies can collect the difference any way they feel they can.
For instance in India after the GST implementation we have a fully digital system tracking the movement of Goods & sercices ~ right from its origin till the end user. Now I know it's far too complicated & the implementation is shoddy but it has real potential. For instance if you've paid GST on certain goods & then use the goods for your own business, like packaged flour in a restaurant, then you can claim a deduction for the amount paid at the time of filing taxes. There's a GSTIN which tracks your business & is necessary to get the deduction.
Something like this could easily be extended to consumers, so that they pay less income tax at the end of the year. Of course this could be seen as an overarch of big brother, or big govt, but there's ways where consumer isn't worse off at the end.
Problem is that "fair" is not defined and ethically is only what corporations can´t get away with.
We all know that the actual money those companies pay on their profits is totally unequal to what smaller, local ones have to pay.
If big govt. don´t step up to tackle this, govt and by extension, people, will loose any power they currently have.
And a 3% tax to compensate is a good start because it would be a first actual action instead of discussing what would be better instead (that may take years to try to implement)
You don't see the federal government trying to fix Google moving revenue from CA to WI, do you?
Honestly, is hard to say what's right or wrong with this. So it will all come down to how they handle this. But it's true that big tech companies don't pay taxes like most other businesses... So in general I think it's OK...
As for BP, it was also a victim of lots of frivolous lawsuits & they had to pay/settle all of them even though they shouldn't have had to.
Here you go!
Nicely how much money of each country go to which departments; and how much each country receives in their departments
Click on Poland for example
It pays: 3,718.0 M€
It receives: 13,357.7 M€
If you dig you can find the actual detailed numbers.
So are you a believer now?
Or will you look to sources you want to believe to confirm your own believes?
I don´t even care if some EU people get rich on it.
Look at it like a bank, but instead redistributing wealth for the people and protecting them from corporations and other nations.
Perhaps you don´t like the fact that bank-people get rich, but you agree that banks are needed. You could make the same case for the EU.
Of course, if you look at the status quo today, it seems highly unlikely Central and Eastern European countries will ever be in a position to help anyone else. But that's another story.
I do perfectly well see the repaired roads and successful projects for farmers, which would not have been possible otherwise. Also, Nergal just provided you with some numbers.