France Orders Tech Giants To Pay Digital Tax (nbcnews.com) 81
New submitter Based.Tech writes: The French Finance Ministry has sent out notices to big tech companies liable for its digital service tax to pay the levy as planned in December, the ministry said on Wednesday. France suspended collection of the tax, which will hit companies like Facebook and Amazon, early this year while negotiations were underway at the Organisation for Economic Cooperation and Development on an overhaul of international tax rules. The Finance Ministry has long said it would collect the tax in December as planned if the talks proved unfruitful by then, which is what happened when the nearly 140 countries involved agreed last month to keep negotiating until mid 2021. "Companies subject to the tax have received their notice to pay the 2020 installment," a Finance Ministry official said. France last year applied a 3 percent levy on revenue from digital services earned in France by companies with revenues of more than 25 million euros here and 750 million euros worldwide. The ministry had hoped to raise about 500 million euros this year from the tax, but the 2021 budget bill puts the figure at 400 million. Facebook's stance is "is to ensure compliance with all tax laws in the jurisdictions where we operate." Other tech companies have made similar statements.
Gonna Have To Call Up Those Pesky Germans (Score:2)
Maybe they can bomb, err persuade France to skip that tax!
Re: Gonna Have To Call Up Those Pesky Germans (Score:4, Funny)
Isn't that your job nowadays, Naca America?
(If National socialists are called N@zi, then national capitalists would be Naca, no?)
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I only live here. Don't give two shits about the politics.
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Haha
Re:Gonna Have To Call Up Those Pesky Germans (Score:5, Funny)
Maybe they can bomb, err persuade France to skip that tax!
You don't know the French very well do you. They can be very stubborn and trying to change their mind about something by bombing them is generally not a fruitful strategy as we Germans found out when we tried to do that back in 1916 [wikipedia.org]. Of course this was before we both decided we were better off being friends, buried the hatchet, ganged up on the English and spent our spare time laughing together at the orange emperor of America over vin blanc et fromage with knackwürste und bier.
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And yet you went back in the 1940's for just old time fun, heh?
Anyway, the tax will just get put on the employees and the customers. Thanks France, for trying to set a precedence for others to follow.
Re:Gonna Have To Call Up Those Pesky Germans (Score:4, Insightful)
Anyway, the tax will just get put on the employees and the customers.
As is often pointed out, we aren't the customers of these platforms. Finally, i get something out of being the product!
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Anyway, the tax will just get put on the employees and the customers.
Anything that helps to deter people from using or working for social media companies is a net win for society.
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And yet you went back in the 1940's for just old time fun, heh?
Anyway, the tax will just get put on the employees and the customers. Thanks France, for trying to set a precedence for others to follow.
Yes, and that did not end well either now did it? I stand my previous statement on the stubbornness of the French and the futility of trying to force them to do anything by bombing them. Having said that, I don't I expect that to put so much as a scratch in the near religious belief of belligerent US American nationalists that they can solve any problem they encounter by bombing it. There is a certain portion of the US population that will only accept the obvious after trying everything else first and one j
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The US didn't bomb the French, they bombed the Germans who invaded France. Nevertheless I have no dog in the hunt so I don't really care.
Your view of the US Government is kinda funny and anyways the citizens of the country don't agree with 90% of the bullshit they do. So judge us carefully.
My comment was half humor, or err humour anyway.
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The US didn't bomb the French, they bombed the Germans who invaded France. Nevertheless I have no dog in the hunt so I don't really care.
Your view of the US Government is kinda funny and anyways the citizens of the country don't agree with 90% of the bullshit they do. So judge us carefully.
My comment was half humor, or err humour anyway.
I thought that the sarcasm dripping off my comment would convey that I was half-joking as well. Apparently the inability of Americans to detect sarcasm has not been exaggerated. However my reference to the near religious belief of US nationalists in their ability to solve any problem they encounter by bombing it is a pretty accurate statement of fact as is the the statement that the US to will only accept the obvious after trying everything else first.
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I would re-evaluate that sentence since most Americans believe we should not bomb problem areas but, rather, nuke them instead. Look how good Japan is since they got a good nuking. We actually have a buncha pussies over here in charge and so our country has gone to shit as well as many others because of our pussiness.
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as we Germans found out when we tried to do that back in 1916
But it worked in 1940 [wikipedia.org].
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France was going to implement this tax before and Trump said I am thinking of taxing all those French wines etc. Trump stands up for the US, Biden will say any board positions for my son? Seriously the French and German government hate Trump because he makes you pay instead of being vampires on the US economy. Fortunately Trumps lawsuits are progressing and our votes will be counted correctly. Then he will say, I think we need a few new taxes for French stuff.
... and Trump and the US hates the French because they want to make tax cheating US corporations pay their fair share of taxes ... corporations paying taxes ... Oh, the humanity! The INJUSTICE OF IT!!!
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Injustice sure, but trump is not the president of france.
If he takes an action which benefits his country then he's doing his job. If he takes an action which benefits a foreign country that has no reciprocal benefits or even causes detriment for his own country then he would basically be committing an act of treason.
Personally i would want a president that puts the interests of our own country first, and i feel it's perfectly reasonable and expected for a country to put their own national interests first e
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That's fine. Your consumers will end up paying the excess costs.
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Hate? man take it easy, no we love the French we just are happy to see french money coming into the US as fast as US money pours into France and all of Europe. And the French would love to punish US corporations I think, having dealt with a French company for many years my experience is that the French are far more likely to hate us than us them.
Making corporations that make money in your country pay for the upkeep of the national infrastructure they use like everybody else does is punishment?? You truly are a well trained useful idiot, or were you perhaps born this dumb? The French have the right to decide whether or not corporations get to be exempt from taxes, they decided corporations won't be exempt from taxes ... get over it. This new found US sense of limitless victimhood was novel and amusing at first but after four years it's getting reall
Commies! (Score:1)
Digital tax (Score:1)
Won't they just pass it through? (Score:4)
I'd think they'd just add an additional line item at checkout or one-click or whatever.
Re:Won't they just pass it through? (Score:4, Informative)
In France the general rule is that taxes must be included in the advertised price. You can't just add a 3% tax fee, a fuel surcharge, a customer service fee, or any other bogus fee at checkout. But otherwise yes, they are free to increase the price of their services in France.
Re:Won't they just pass it through? (Score:4, Insightful)
The EU's penchant for requiring the advertised price to be the same as the final price is often brought up as an advantage over the U.S. But it only works because the EU countries have consistent national tax rates. The U.S. has multiple tax rates - at the state, county, and city level. It's impossible to advertise a final sale price, because the price might be different in the very next city which has a higher sales tax. And i seriously doubt the law prohibits Amazon from itemizing the taxes and fees in your order receipt. It just means the price you see on Amazon's product listing is going to go up due to the new tax being added in.
All taxes are eventually paid for by the people, because the people are the only source of productivity. Even a corporation is nothing more than a bunch of people agreeing to work together. So you can't really tax a corporation. Those corporate taxes just get passed on to people - employees (lower wages), customers (higher prices), and owners/shareholders (smaller dividends).
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Yeah, the idea is that Amazon and similar criminal organizations hqve moe expensive prices, so others, like our own, become cheaper in comparison, driving people to choose options that ae beter for themselves.
Ah, so there is the meat of the issue. This has nothing to do with taxing. This "tax" is aimed at foreign companies. It's all about the French state supporting French companies. I'm glad you see it that way. Because I'm sure you will agree with me that this is against EUSSR rules.
Also, please elaborate on why Amazon is, in your opinion, a criminal organization.
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I wonder if this will affect certain POS machines that u
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it's 25 million euros revenue in France AND 750 million euros worldwide
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Re:Won't they just pass it through? (Score:5, Insightful)
You think Amazon, Facebook etc. aren't already charging as much as they can get away with? If you're already charging the optimal monopoly price, any tax will cut into it.
"Impossible", funny. If they calculate it for their own purposes (and they damn well have to), they can share it with the customer.
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You think Amazon, Facebook etc. aren't already charging as much as they can get away with?
Sure, but that is constrained by competition. If Google charges more for ads, advertisers will run more ads on Facebook and fewer on Google.
But this tax raises costs across the board, so it won't be competed away since they all have to pay it. So it is much easier for them to pass on the cost.
Nonetheless, many people don't consider higher prices for ads (and thus fewer ads) to be a bad thing.
Much of advertising is a Prisoner's Dilemma [wikipedia.org]. Peugeot runs ads to convince customers to buy a Peugeot instead of a
Re: Won't they just pass it through? (Score:2)
But if everyone ran fewer ads, what would all the advertising majors of the world do? Think of the jobs!
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Today I learned "ads" are a commodity product with no different payoffs. Wow, imagine the cost savings as I get rid of a lot of people who try hard to target the right types of adds to the right people.
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Ads are not commodity items. You can't just take an ad from Google and put it on Facebook and expect equivalent value from it.
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If they calculate it for their own purposes (and they damn well have to), they can share it with the customer.
And they do...once you go to checkout and tell them where you live. But without knowing the city where you live—which they generally don’t ask until you go to pay because it’s an invasion of privacy that they put off as long as possible so as to not drive away customers—it’s impossible for an online retailer to show the final price. Physical retailers have no excuse, however, but online retailers have no capacity to show the final price in America until the customer provides an
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The U.S. has multiple tax rates ...
What France and other countries have, is a lack of double-dipping: If the federal tier charges income tax, then the state and municipal tiers are forbidden to charge income tax. (Don't have to ask 3 revenue departments how much tax to pay.) The states in other countries also have coherence: That is, they agree to charge the same fee as the other states.
Also, municipal councils are driven by a fee per service model: In many countries they can't levy a tax at the check-out. (Making prices uniform throug
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The EU's penchant for requiring the advertised price to be the same as the final price is often brought up as an advantage over the U.S. But it only works because the EU countries have consistent national tax rates. The U.S. has multiple tax rates - at the state, county, and city level. It's impossible to advertise a final sale price, because the price might be different in the very next city which has a higher sales tax.
It's far from impossible. In the physical store it's obvious, since said physical store is in a physical location. In the digital world, ask the customer to enter their zip code, and then you can show the actual price. This is what they do here for car sales, since each state has different stamp duty and other related taxes.
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Consumers mostly don't pay anything. Services like Facebook are free to use, they make money on ads. So if anyone pays more it will be advertisers.
Advertisers are unlikely to pass the cost on. They will have a budget based on maximising ROI.
Those who sell to customers have to contend with the fact that French consumers can buy from any EU country easily. If it's cheaper on Amazon Germany they can just go there. I've done that before, before I had my citizenship ripped away.
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It is possible to advertise the final price, especially in a shop, you must know what the price will be otherwise you can't charge it. The fact taxes vary from state to state just makes it more important since it is harder to work out the price.
Even online companies like Amazon can work out the final price, you are logged in and they have your address, the need to know the taxes in order to charge you. The whole argument is just nonsense designed to keep marketing practices that make you think you are spend
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> The U.S. has multiple tax rates - at the state, county, and city level. It's impossible to advertise a final sale price, because the price might be different in the very next city which has a higher sales tax
That's like saying there's no way to do interstate commerce because who knows what kind of laws would be allowed in one place vs another?!
Integrated cultural behavior that hasn't been curated yet is not "impossible". It would be inconvenient. Insurers seem to manage just fine.
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Amazon, Facebook, et al aren't going to magnanimously pay for this tax out of their own pockets. They're just gonna raise their prices for French customers to offset it.
Which would be what their law abiding French competitors have been doing all along. That means fair competition between local and global companies.
Gee, the whole thing suddenly made sense now!
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Amazon, Facebook, et al aren't going to magnanimously pay for this tax out of their own pockets. They're just gonna raise their prices for French customers to offset it. The people paying for this tax will be the French citizens themselves. Whether directly via higher retailer prices like with Amazon, or indirectly due to higher advertising costs with Facebook increasing the wholesale cost of the products directly from the manufacturer.
Nothing wrong with that. It will give a small edge to brick and mortar stores and other companies paying local taxes.
All taxes are eventually paid for by the people
actually this is a common misunderstanding of basic economics. Please read on the price elasticity of demand.
https://en.wikipedia.org/wiki/... [wikipedia.org]
Taxes are usually shared between the producer and the consumer.
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Amazon, Facebook, et al aren't going to magnanimously pay for this tax out of their own pockets. They're just gonna raise their prices for French customers to offset it.
That's the whole point!
To level the playing field between French companies that have to pay taxes, and American companies that don't.
Did you only just realize this?
no because french can shop in germany (Score:2)
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Re:Won't they just pass it through? (Score:5, Informative)
In the EU that's the general rule - all taxes are included into the price tag and you pay what you see.
It's also why price comparisons are unfair since US prices are always pre-tax while EU prices are post-tax. Plus all the stuff like mandatory warranty terms mean you also have to add the price of an extended warranty to the price. Apple's EU prices include the cost of an AppleCare plan into it since the mandatory warranty on the stuff is basically the US warranty plus AppleCare. Apple has gotten into trouble for this.
So EU prices generally include VAT, extended warranty and the price of the item, and you'll find the conversion works out fairly accurately for a large number of things.
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While that isn't the ideal reaction, it doesn't conflict with the stated purpose of a tax like this. They want these companies to pay more taxes where they provide the services instead of just where they set up their tax havens / headquarters. Even in situations where competition is weak enough that the full tax is paid by the customer they still fulfilled their most modest goal.
And in any situation where these international companies do raise prices, it opens up more space for competition within France. Th
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SALES taxes (also VAT in EU) usually levy at time of sale.
INCOME taxes are usually levied at reporting time.
making up for missing details with my assumptions (Score:2)
... a 3 percent levy ... with revenues of more than 25 million euros here and 750 million euros worldwide.
Seems a bit unfair to flip on a tax under very narrow circumstances without some kind of "soft landing". Like start with a 1% on all revenue above 5 million, then 2% on the next 10 million - 25 million, then 3% for everything about 25 million. Or whatever brackets make sense. If done carefully a government can bring in more tax money while also spreading the tax around more broadly so that small companies pay proportionally less, while larger companies also feel that they're being treated fairly.
And maybe
Re:making up for missing details with my assumptio (Score:5, Informative)
But at least the companies have a choice. They can:
(a) Pay tax on their profitable in come in France
(b) Pay the 3% tax
(c) Do no business in France at all
Re: making up for missing details with my assumpti (Score:2)
(d) declare no profits made, and all income donated to their tax avioidance organ, err, I mean non-profit foundation.
Corrective truth (Score:1)
Revenue tax.
. Direct tax on top line revenue - cannot get out of it by accounting gimmicks (amortization,goodwill, depreciation, compensation tricks)
. Cannot shift money from high tax countries (France) to low tax countries (Ireland)
and the main ones
. Company makes business decisions on what brings in money and not transactions for tax purposes only
. Drastic reduction of regulation on the company
- Doesn't have to worry about all the many hundreds of things done for tax purposes only
Accounting gimmics cost many thousands of jobs (Score:1)
In my over 25 years of accounting related computer work for large companies, there are tens of thousands (hundred of thousands) of persons who were laid off just for business transactions related mostly to favorable tax treatment.
Companies need to be measured on the top line revenue first and then to a much lesser extent the profits.
The difference between a lame fiscal quarter and a blowout quarter for many large companies is a few million dollars of which many companies use accounting gimmicks to beat thei
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While I don't disagree with the purpose of the tax, GP was talking about avoiding a cliff. Such that one extra sale costs the company 3% of 25MM (making them lose a lot of money and possibly shut down in late December to avoid just going over the limit). Such as charging 6% of each sale from 25MM to 50MM, and then 3% after that, so it averages to 3%. Or something similar.
In general, I think cliffs like GP is trying to avoid are pretty bad for everyone, including society. But if there's a good reason ple
Re:making up for missing details with my assumptio (Score:4, Interesting)
It's not only American companies that avoid tax. Thanks to Brexit for instance, many British companies moved to Amsterdam because The Netherlands is a tax haven.
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It's a start. It's not perfect, but it's better than nothing.
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And maybe drop that 750 million euro worldwide bit, seems like protectionism to me.
Like using "national security" pretense to heavily tariff Canadian imports?
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Multiple things can be wrong. This isn't an either-or situation. Protectionism is, generally speaking, not a fair way to deal. Really letting corporations benefit from any government decision is a recipe for having corporations spend a huge amount of resources trying to take over the decision-making of the government. Leads to corruption, and perhaps even ends in tyranny.
Good. (Score:2)
I think it's a good thing. Other countries should do the same.
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I think it's a good thing. Other countries should do the same.
Yes, it is more than right time to address the virtuality and taxability of the digital income.
The outated concept of states and countries. (Score:1)
Given the sociopathy caused by passing Dunbar's number and even Dunbar's number squared (meaning even the number of groups becomes too much), such massive social structures always were a bad idea.
(That includes corporations too, by the way. States are useful now, to, at last in theory, give us a counter-force to balance corporate power. But corporations also should not exist.)
I'd prefer we go back to structures that can still be self-governed, where citizens still have a measurable infuence, and you know ev
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+1, Insightful. Well put. Organizing into smaller groups to promote empathy and sympathy, as well as a more even power balance, is a worthy goal.
The whole point of society is mutual aid; if a structure gets so large it works against that, or individuals work against that at such a scale it affects the entire society, then they should be broken up or have their reach reduced.
That said, the devil's in the details. How would you do it?
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Two thoughts:
There are many human enterprises where having more than 150 people working in concert leads to a better outcome. You'd be throwing away economies of scale.
As soon as someone realizes the benefits of the economies of scale and chooses to break the rules they're going to destabilize this utopian system and it's going to collapse.
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There are also many enterprises where the scale becomes unwieldy and inefficient, thus actually driving up costs and damaging quality of service.
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made of streets of about 100-150 people that are partially self-governed but cooperate to form the city.
Do you mean Home Owners Associations?
You have just (re)invented hell on Earth.
I have a business that sells on Amazon France (Score:2)
They just pass this tax on to us by increasing their rates and we can't say no.
It will go the usual way (Score:2)
They have creative bookkeepers.All the benefits are done by a tax-exempt Foundation in Lichtenstein an so they'll pay just around 1€.
My opinion (Score:1)