
Macron says France and U.S. reached digital tax deal - elsewhen
https://www.reuters.com/article/us-g7-summit-tax-macron/macron-says-france-and-u-s-reached-digital-tax-deal-idUSKCN1VG1N7
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socalnate1
So basically they just kicked the can down the road a bit.

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adventured
The plan was always to reach a more comprehensive arrangement in the near
future, according to France (they stated it was a temporary measure until OECD
members could come to a solution). The US has repeatedly said it was willing
to work with OECD members to come up with a digital tax solution. The US
position for example has never been blanket against implementing an OECD-
agreed digital tax. So there is likely room to find a compromise. Kicking the
can down the road until that can be accomplished, is probably the best outcome
here.

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spiderfarmer
I wouldn't be surprised if new taxes are all based on revenue in the
concerning region and not on profits. Taxes should just be part of the cost of
doing business.

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olliej
I'm kind of surprised - I'm sure going forward treaties/agreements countries
undertake with the US are going to start having withdraw penalties.

I certainly wouldn't trust any agreement currently.

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ddxxdd
>3% tax on revenues earned on digital services in France

A tax on _revenues_???? Not on profits, but on revenues, which do not deduct
operating costs????

It looks like France is continuing its reputation as a reverse tax haven, IOW
a place that the rich keep their assets away from.
[https://www.nomoretax.eu/france-wants-back-rich-
people/](https://www.nomoretax.eu/france-wants-back-rich-people/)

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omnimus
This type of tax is gonna happen all around eu. The reason being - big digital
services pay almost zero taxes by doing clever tax tactics and moving all
their revenues to tax havens.

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alt_f4
There's an argument to be made that they also don't use anything in that
country because they're _digital_ services. And, supposedly, taxes are to pay
for infrastructure? Although these days the view seems to be, let's just take
as much money as possible, even if nothing / very little is provided in
return.

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m12k
Here's an example: A German company pays to advertise to a German consumer. It
used to be that the money spent on that advertisement went to a German
advertisement company, so that money would stay in the German economy, and the
system would be sustainable, with money flowing around the system but not
escaping. Now the ad money ends up in the Cayman Islands via Ireland and none
of it is retained in Germany because the multinational advertising company has
no/very few employees in Germany (no salaries/income tax) there's no VAT
(because the ad sale is a B2B transaction) and there's no corporate taxes
(because the ad company uses transfer pricing - e.g. licensing of IP that they
can price arbitrarily - to shift all their profits to Ireland where they make
them disappear in a puff of smoke). The end result is that money is being
siphoned out of the German economy and into tax havens (so there's no return
flow like there'd be if this was just normal trade with other active
economies) making it harder and harder to sustain the German economy. There's
a leak in the system when selling to consumers, and if it's left unchecked
it'll slowly collapse the middle class and consumerism as we know it. I'm not
sure if revenue tax is the best solution, but we need A solution. (or you
know, we could just blame the foreigners and let the weakest parts of society
fight over the jobs and shreds of wellfare state that are left, which seems to
be the preferred solution these days). Mind you I'm not arguing against
international trade (which increases competition and drives down prices) but
against the unfair competitive advantage that multinational companies,
especially digital ones, have over local companies by not needing to pay taxes
at all. We need an even playing field, tax-wise, that's all.

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alt_f4
> It used to be that the money spent on that advertisement went to a German
> advertisement company

It sounds to me like the problem is that the German economy failed to produce
a Google competitor or, at least, a decent local German online advertising
network that the German consumer would want to use. So, now they have a
problem that they're trying to solve with taxation instead of innovation. This
won't work, it just creates barriers to international trade in global world.
It is 19th century economics.

> have over local companies by not needing to pay taxes at all

That is incorrect. They pay their taxes in their home countries. Why should
they be penalized extra over local to Germany companies by having to pay
double tax: once at home and once in that country?

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m12k
You don't seem to understand how transfer pricing and tax havens work. These
companies are not paying taxes on profits from most of their foreign sales in
their home countries - the home corporation pays taxes on their domestic
profits, and profits from those international subsidiaries that can't be
channeled to tax havens (e.g. not from Europe) while all those profits that
can make their way to tax havens do. Here's an article explaining how Apple
does it: [https://www.irishtimes.com/business/apple-s-cash-mountain-
ho...](https://www.irishtimes.com/business/apple-s-cash-mountain-how-it-
avoids-tax-and-the-irish-link-1.3281734)

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tonfa
What that article doesn't make it clear is that the overseas cash was still
subject to US taxation.

A few years ago, that taxation could be indefinitely deferred, but that's no
longer the case. So calling it a tax haven is somewhat misleading if we're
talking about US companies.

