France Plans Digital Tax This Year

[engine]

France has said it's planning to go ahead this year with a tax on big digital business, despite previously agreeing to wait while negotiations on an international deal is agreed.

“Never has a digital tax been more legitimate and more necessary,” Finance Minister Bruno Le Maire told journalists on a conference call, adding such companies were doing better than most during the coronavirus crisis.

“In any case, France will apply as it has always indicated a tax on digital giants in 2020 either in an international form if there is a deal or in a national form if there is no deal,” Le Maire said.

[reuters.com...]

[topr8]

as this is foo, i guess i can speak more generally ... !

in the uk (and everywhere) we need to change outdated laws ... the old laws were based on the fact that companies were generally owned by people who lived here.
when i say this country then insert the name of your own country ...

maybe there were tax loopholes, and maybe it was unfair, but ultimately the money earned was kept in this country and it was then spent in this country. some companies and individuals often made vast profits but the money filtered down one way or another.

but in this modern global world companies are often not owned by people in the country in which it operates ... so when they use the loopholes the money is lost for ever, it is sucked down the plughole and goes away.

that is why in my opinion, we need to fundamentally change our tax laws for both corporations and individuals ... because they were conceptualized in a completely different era! money earned in my country should pay tax in my country - simple!

i'm not just questioning the global corps!

i also think this applies on an individual level .. so for instance there is a political theory that spending on massive infastructure projects is good for the economy .. because the workers on the project then spend their wages back into the economy and so on!

i totally agree, however this falls down when those workers are not from - insert country name here - indeed lots of works are from foreign countries ... so they don't spend their wages in - insert country name here - they actually send a large part of the wages home... which is great ... however it means that the money does not go back into the local economy at all.

anyway - if you get my point then great, if you don't i imagine you think i'm some kind of r*cist!

[NickMNS]

@topr8
What you say makes sense. Using your logic, the simplest solution would then be to tax the consumer of the goods eg.: sales tax. This is unlikely to happen as no politician wants to be seen raising taxes on his/her citizen. The politician also doesn't want to be seen raising taxes on its local business. So the political solution, tax foreign companies.

Here is the flip side. A UK citizen travels to Spain for a holiday, is the owner of the Spanish restaurant where the UK citizen eats a meal then expected to pay tax in the UK. Is Spanish restaurant owner now obliged to check everyone's citizenship such that he can enforce the tax laws of a country that he/she does not reside in or do business in? If once the UK citizen decides to use his/her computer to visit a Canadian website, is the Canadian website now expected to pay a tax to the UK and to check and validate the citizenship of every user in order to abide a by a taxation law of country where the webmaster does not reside or operate a business? If the UK can do this, so can France, Germany, Indonesia, North Korea, Iran and on and...

[topr8]

@NickMNS yes i totally agree, it is a total minefield ... and i don't have a solution!

i think your thought that the political solution will end up being implimented is correct, it's the easiest and most palatable way when you need votes!

didn't california propose that CA sales tax should be charged by all websites if items were being shipped to CA residents, there are of course already import duties on all kinds of goods charged by different countries.

[LifeinAsia]

Because nothing says "let's kick the economy when it's down" like taxing the only sector that's surviving.

[engine]

The timing of this smacks of desperation, especially when there is a review and discussion going on.

[JorgeV]

Hello,

What about Adsense for example? A publisher earning xx from US visitors, yy from UK visitors, zz from Japanese visitors. Would such publisher has to declare and pay taxes in each of these countries? Over the curse of a month, I have a adsense earnings from 30 different countries.

"or" the thing is, for EU publishers, it's Google Ireland paying, so may be Adsense's earning would have to be declared and paid in Ireland ?

I know that the above referers to "Internet giants", however, the EU's GDPR was made to address abuses from Internet giants, but at the end apply to everybody, no matter your size or earnings.

[topr8]

at the end apply to everybody, no matter your size or earnings.

i agree. it seems always the way that it filters down to the small guys, creating ever more obstacles to running a small business.

[tangor]

It's just the seeking of ka-ching. Governments can PRINT money, but they can't print it for themselves. They have to take it from others (you, me, and all the plebs). They can take more if it comes from corporations (bigger funnel!).

Sad thing is---no matter how much government takes---they never seem to spend it wisely in (insert name of YOUR country here).

[lucy24]

is the owner of the Spanish restaurant where the UK citizen eats a meal then expected to pay tax in the UK

No. He is expected to pay taxes in Spain, not in the offshore tax shelter where the restaurant chain has its headquarters.

didn't california propose that CA sales tax should be charged by all websites if items were being shipped to CA residents

This has been a thing for years in an increasing number of states. But afaik only on the state level; counties and municipalities that have additional sales taxes of their own don’t get a cut.

[iamlost]

This KPMG (one of the ‘big 4’ global accounting firms) article from May 2018 is still the most coherent summary of the process - amusing as it is now 2-years old: Interim measures for taxing the digital economy allow time for global consensus [home.kpmg].

My reading of the French announcement is that (1) Covid-19 has accelerated need/want for revenue and (2) they want to give a kick to the international consensus process.

[brotherhood of LAN]

Think the UK should consider it too, 5% seems not too extravagant. Apparently UK e-commerce revenue is around the £700B mark (1) ... so potentially £7B per 1% of tax. It might slow the demise of the high street in smaller towns since their margins won't seem so squeezed.The profits generated by the big online outfits is pretty obscene and most countries tax laws can't keep up with them. At the very least the revenue could be prioritised for giving nationals a good Internet infrastructure.

(1) [statista.com...]

[edited by: not2easy at 1:10 pm (utc) on May 17, 2020]
[edit reason] user correct/typo [/edit]

[thecoalman]

This has been a thing for years in an increasing number of states. But afaik only on the state level; counties and municipalities that have additional sales taxes of their own don’t get a cut.

Not sure what they do in other states but In PA if the sales tax is not collected by the vendor you are supposed to submit it to the state, of course no one ever does.

Everyone has their hand out and if every taxing entity got their wishes business's would have nothing left. I think it's fair that taxes be paid in the primary location of economic activity but if you have a gas drilling company headquartered in Texas that is drilling gas in Pennsylvania and selling that gas to someone in New York where is the primary activity? Gas companies pay relatively low fees in PA and the argument is increase them because people in other states will pay them. The problem there is some politician in another state is saying the same thing about their products.

I don't know what the specifics are with France but if they are piling taxes on top of existing taxes how is that supposed to work? If you have three countries each charging Google 33% income tax on total income Google has 1% left.