Italy Follows France in Levying a Digital Tax (wsj.com) 67
Italy soon will join France in applying a new tax on large tech companies, a move that could deepen trans-Atlantic trade tensions and snarl up already-faltering negotiations over how best to tax companies such as Facebook and Google parent Alphabet. From a report: The new tax, passed this week by Italy's parliament, will take effect Jan. 1. Similar to the tax implemented this year in France, Italy's imposes a 3% levy on some digital revenue for companies with more than $835 million in global revenue, including least $6.1 million in Italy. The Italian announcement, combined with the French tax, complicates a broader effort among more than 100 countries to overhaul corporate taxation for the digital age. Many countries say U.S. tech companies pay too little income tax in the territories where they have users. Until now, most have held off on imposing their own national taxes. That reluctance may be fading, however, with others such as the U.K. or Canada potentially ready to follow suit.
Good (Score:5, Interesting)
About time those silicon valley companies started paying their dues. If you operate in a country and earn money due to that operation you should pay tax there, end of.
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Stuff that didn't exist 20 years ago is a drag on governments how?
Answer: Governments get elected promising to spend money. So if a whole new industry springs up, on top of everything else, that's a new thing to tax, this means more to spend to elect ourselves!
Launch all memes! "Fair share", you've got work to do. "Evil corporations", go on? Get outta here you rascal! "Greed!", your country needs you!
Nah. Nevermind. This isn't how the world works. Go on about your lives.
I'm ready for my downmod by t
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Remember: the important thing about memes is they get you to behave in ways that get you to spread them, and defend them.
What's it like being a programmed cog defending memes by hiding posts exposing them? You are proving my point!
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Exactly. It's like leaving alcoholics in charge of a liquor store. The government has a problem spending too much money. So what do we do? Give them more money of course! Because this time it will surely be enough.
Re: Good (Score:2)
Re: Good (Score:5, Interesting)
Why don't countries fix the current tax code instead of making special taxes based on perceived feelings? They "feel" these tech companies are making too much money but still somehow operating within the law.
How do you explain cities adding taxes to items like vape juice? Sales tax is already paid on the item but since the government saw the market grow quickly their hands started to shake. They needed another fix of that sweet money. In the citizens best interest of course. Like your alcoholic buddy perking up when a beer is cracked open, the government is there.
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They don't "feel" anything, they know that these companies use loopholes to avoid paying the intended tax rate, while local ones are forced to. It's unfair competition aside from anything else.
It makes sense to close a loophole. A level playing field is critical for markets to function properly.
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Enacting a new tax specific to a single industry is not closing the loophole.
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Why don't countries fix the current tax code instead of making special taxes based on perceived feelings? They "feel" these tech companies are making too much money but still somehow operating within the law.
How do you explain cities adding taxes to items like vape juice? Sales tax is already paid on the item but since the government saw the market grow quickly their hands started to shake. They needed another fix of that sweet money. In the citizens best interest of course. Like your alcoholic buddy perking up when a beer is cracked open, the government is there.
Because politics isn't about reality, facts, or truth: it's about perceptions.
Tech companies are currently perceived to be taking advantage of society, therefore they are vulnerable to sociopaths in government who want more money and don't want to have to work hard to get it.
If politicians were actually looking out for the interests of society, there would be no business taxes other than taxes on stuff crossing borders.
All the income that currently comes from business taxes is income that comes from a regre
Re:Good (Score:5, Informative)
Exactly. It's like leaving alcoholics in charge of a liquor store. The government has a problem spending too much money. So what do we do? Give them more money of course! Because this time it will surely be enough.
No, this is like owning a flea market where everyone who sets up a booth has to pay you a cut of the profit at the end of the day, only these companies are handing most of their money off to their "supplier" (who happens to be married to them) before you can get your agreed upon cut so you essentially don't get paid while they keep all the money to themselves.
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The government has a problem spending too much money.
Last time I checked, the police and firefighters were operating just fine, and the court system was up and running. In my (non-US) country, the government-funded health service was doing well and the (government-owned) street and train operating companies were providing excellent infrastructure. The governmental postal service delivers letters and packages to the most remote village within two days
I'm the first to agree that there is room for improvement and that corruption of various kinds (including lobby
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Help! help! I'm being repressed!
Re:Good (Score:4, Interesting)
Re: Good (Score:2)
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What exactly do you think Trump is doing with his tariffs? He is specifically targeting foreign companies to give US companies an advantage.
But I get it, it's OK for us to do it. I'm not even totally against the tariffs. I just have little confidence in the guy doing the negotiating.
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Oddly enough, that's what ALL tariffs have been intended for, no matter the country, no matter the time....
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So, Italy and France are using protectionist taxes (according to parent poster). I'm not totally against protectionist policies, but I'm not going to expect other countries not to do it if we do it. As in much of life, it isn't exactly a black and white issue. There is some case to be made for free trade and there is some case to be made for protectionism.*** I've advocated for protectionism for some time ***.
I would be more at ease about it if it was another administration attempting to do it. The current
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Not to give an advantage. To level the paying field.Those American companies have been avoiding taxes by maintaining the fiction that sales are made in Ireland, despite the larger number of local sales personnel in every other EU country.
I am not claiming that what they do is illegal, instead they use a legal fiction and the the Irish
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With the exception of Estonia and a couple of other Nordic and North European countries, a large number of other EU member states are not good at collecting tax, their tax laws are terrible (though rather quaint compared to the gargantuan and horrific U.S
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What if you don't operate in the country, but people in that country use your services anyway?
While I don't have a problem with the principle behind this tax, the only ways I can think of to enforce it are troubling. Either you basically extort the money from a foreign company like you're the mafia ("Give us 3%, or else"). That breaks the "governments should not have any control over what happens in othe
Re: Good (Score:4, Informative)
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Just don't act all surprised when they "there's too much of that European stuff here anyway" double or triple the tax on all European goods.
Good (Score:5, Interesting)
I don't think it's all that simple (Score:3)
Government and Society are like any complex system, they need regular maintenance. And not the exciting "With the blood of Patriots" kind. The boring kind that nobody likes to do. I think we'd all be a lot better off if we'd accept that there is not permanent solution to these sorts of problems and that we'll always be tweaking around the edges.
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You missed the fact that close to 1% of adults are in prison is the USA...FREEDOM indeed.
Elections are gerrymandered
There is aggressive voter deregistration happening to stop segments of the population voting
Lets not forget about all the spying the US does against its own people.
What if they don't pay? (Score:1)
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Yeah, a company that sells services, rather than a physical product, does not need a physical presence in a country. They don't even need a local address ( .it ) Users just go to .com addys anyway.
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However, the purchasers of the services likely will have such a presence... so the Government could just create a new corporate purchase tax rate on "internet-based services from non-tax-paying overseas companies" of, say, 150%.
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The biggest gripe is probably with one large company that sells just about everything at a very large scale, while local distributors, stores, and shops are at a disadvantage, or flounder. That gripe is unfairly expanded to other large companies that have specialised in being social
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Well, the French Government could pass a law to prevent companies trading in France from buying advertising and other services that target French people from those companies that refuse to pay the imposed taxes.
Repeat that for several European countries, and the revenue gained by exploiting the users and their data might be exceeded by the cost of providing the "free" services to them.
Then, either the services start paying their taxes, or they close up shop in those countries - either way it's a win.
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They could remove the tax deductions local companies pay to advertise on those services , ie tax at the source., this is the easiest option and makes the most money because its recovery on the full amount rather than on profits.
And yeah, put out an international warrant for Zucks arrest....hell they could e
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What bad things are going to happen if they don't pay? Is France and Italy going to block access to Facebook? Try to extradite Zuck?
Extradite and jail executives of foreign companies that do not comply with US law like FCPA: this is the way US has been doing for a while...
How does this work in practice? (Score:2)
When somebody comes to my website, and pays me via some kind of bank transfer, how is that any different from somebody coming to my shop in my country? How's that related to any country my client may be from?
And most importantly: How would that country even be able to tell?
Sounds like Digital Restriction Management: It cannot possibly ever work, but nevermind basic physics, it MUST be, so let's carry on anyway!
Genius! I should teach my pigs to fly, that way!
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In the USA you are free to innovate software.
In the EU the gov is very innovative with new software tax.
Hmmm. Time for America to do a VAT (Score:3)
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Seriously, America needs to add a VAT tax here like other nations
Not only no, but Hell no.
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Re: Hmmm. Time for America to do a VAT (Score:3)
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A 20% tax? Oh yeah that will go over great.
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Over in the EU the VAT is close to 20%.
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True in part: states usually have a standard VAT rate around 20% but reduced rates for categories of products, so your mileage may vary a lot.
Furthermore, introducing the VAT would mean replacing the sales tax, which on paper has a much lower percentage, but in practice it has the problem of cascading. Avoiding cascading and the inherent transparency of the VAT for the consumer are the main reason it's the more broadly implemented system.
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And in Australia it's 10% what's your point?
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More sales taxes only hurt the people with limited income.
America already has one... (Score:3)
...well, more than one. It's called "Sales Tax," and is imposed at different rates depending on the state, and additionally by some cities too (can't remember if there's a federal sales tax as well.)
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"The congress shall" "pay the Debts"
wow has anyone in Washington DC read this. Seems like ALL they can do is spend, spend, spend, spend and well spend!!
Just my 2 cents
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Why? (Score:2)
Is there some reason they're targeting internet based companies specifically, other than they have a lot of money? Why not just raise the corporate tax rate across the board?
Re:Why? (Score:4, Informative)
Re:Why? (Score:4, Insightful)
It seems unlikely only internet companies are playing such games, but perhaps they don't want to just close the loopholes for political reasons, and the mostly foreign internet companies don't have powerful domestic lobbies.
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Of course only internet companies are playing those accounting games, because they're the only ones who can. You can't claim you do all your business in Ireland if you have a physical store in France. Infinitely easier when you can have all your French customers (advertisers in the case of the companies targeted here) make their purchases through a server located in Ireland.
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Because internet entrepreneurship in Europe is particularly shit at actually delivering services people want to use. Yes, I know Spotify. Doesn't change the big picture.
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Quite the opposite. Internet entrepreneurship in Europe is so good that American companies constantly and regularly buy out European startups and then rebrand them as their own.
As for services people want to use, just because you don't know or hear of something doesn't mean it doesn't exist. E.g. Amazon can go pound sand. I have 6 alternate European Amazons who actually deliver faster and have less shit on their website to choose from. But because they are 6 rather than one mega corp, you've probably never
Huh? (Score:2)
Does this mean they are getting rod of analogue taxes?