France Approves Digital Tax on American Tech Giants, Defying US Trade Threat (cnbc.com) 313
France's Senate approved a tax on the revenues of tech giants like Google, Amazon and Facebook on Thursday, defying a warning from the President Donald Trump administration that it "unfairly targets American companies." From a report: On Wednesday, Trump ordered an investigation into France's planned "digital tax" on tech companies. The 3% tax would apply to the French revenues of roughly 30 major companies, mostly from the U.S. "France is sovereign, and France decides its own tax rules. And this will continue to be the case," France's Finance Minister Bruno Le Maire said in a statement. He added the U.S. and France could find agreements, rather than using threats, to reach a deal on the "fair taxation" of internet giants.
What if... (Score:2)
American Tech giants cut-off/block France?
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American Tech giant's shareholders will demolish American Tech giant's CEOs for giving up on so much revenue for the sole purpose of trying in vain to make a point.
Seriously it's hard enough to get this kind of policy through on the likes of China, imagine the backlash for doing it to a western ally, one which provides by nature of the tax needs to provide a company with over 25million EUR in revenue.
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I think the point would be to put a stop to this sort of thing before it can spread. 3% of revenue is hard chump change. But even if it were, the problem is if this spreads: If Germany also wants 3%, and so does Spain, and South Africa, and Australia, and so does India, Malaysia, Madagascar, Brazil, and Jamaica, and Mexico. Even if any single attack did minimal damage, pretty soon, you're talking about real money.
And no, this is not an ordinary and fair tax. If it were, the tax would be applied equally to A
Re: What if... (Score:4, Interesting)
These taxes coming to EU countries are intended to tax the profit made from citizens in individual countries, not global profit. They won't sum they way you insinuate. The target companies have been very good at choosing where they want to pay tax, this shifts that to where the profit is actually made.
Trump is annoyed because it's fairer.
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They still sum up, but it's not summing the percentages. E.g. 3% in France + 3% in Germany + 3% in Belgium != 9% of global income. But it does represent a 3% hit to the margin, and the more countries that do it, the closer to that 3% global margin it gets.
Re: What if... (Score:2)
Sounds fair to me. But then, I'm a dirty socialist.
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Oh no! You mean companies wont be able to enjoy continual 0% tax rates?
It's almost as though Governments need funding and feel that corporations should contribute.
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And no, this is not an ordinary and fair tax.
There's no such thing as an ordinary and fair tax. There isn't a tax law on the planet which applies flat equally to everyone, and while were at it there isn't a tax law on corporations anywhere in the west that doesn't have some threshold where payment is different from that of some other corporation.
Life's unfair, deal with it.
Re:What if... (Score:5, Insightful)
American Tech giants cut-off/block France?
You mean what if American Tech giants abandon the European market so that competitors can rise up in a safe American Tech giant free zone to later become fierce competitors of American Tech giants? I sincerely hope they'll do that. However the odds are slim that the American Tech giants will go back to California and sulk because that would completely destroy their ability to crush any and all competitors that could possibly threaten their control of the set of the internet activity they have claimed as their personal fiefdom.
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Typical EU protectionism. It's a members-only economic syndicate and struggles to access new markets outside of its regulatory range.
US tech companies can: 1. fire all EU employees; 2. cease operating physical businesses in the EU; 3. let EU citizens access services online only; 4. use the protection of international banking to let EU citizens escape VAT thus making services even cheaper and reducing tax revenue to 0.
Cyberspace is not the same as meatspace. The same attitudes w.r.t. regulation isn't going to work without compromises from all sides. It might be easier for the EU to simply extract the amount from every EU citizens' paycheck.
What a typically Trumpian imperialist point of view. You are basically talking about Google, Amazon, Facebook crawling up Trump's ass and joining his trade war with the EU because trade wars are so easy to win. Of course, in your Republican wank fantasy, the EU would just sit there and take a beating. No reaction, no counter moves, no creating closer bonds with China at America's expense. The more of this game you play, the more you turn America's financial centres into an instrument of punishment, the more
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American Tech giants cut-off/block France?
They don't need to do anything of the kind. All they need to do is leverage all the dirt they have collected over the years through data collection on the particular French politicians behind this move and destroy them and their careers for life with a few strategic "leaks", conveniently-timed "data breaches", etc, that reveal career- & reputation-destroying information to the public.
Elizabeth Warren in the US received a shot across her bow from Facebook after her call to break up FB. Warren's ads sudde
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I think that they can only risk playing that card once, and they are saving it for something really important. If they get caught stepping on the wrong toes or someone powerful feels threatened, it will be the death blow to the company.
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I think it's weird that you're cheerleading a corporate surveillance state so powerful that it can blackmail and extort politicians. And then your sig complains about a government surveillance state. At least with a government surveillance state people can vote for change (personally, I believe that the Dems lost a lot of support because Obama continued to expand the surveillance state apparatuses that W. had set up). Here's your new sig: "Libertarianism (aka US 'Conservatism'): Ideas so good they need a co
Not suprising. (Score:2, Interesting)
The Trumps approach to trade has weaken our overall effectiveness, and will have long term repercussions that will take generations to repair.
I expect more EU members finding ways to further separate themselves from the American Economy, because it has become more chaotic it now a less of reliable business partner. I can see more taxes and rules that can cause more of a separation from the US, and more internal EU trade, or trade with other nations.
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I'm not a looser
I beg to differ.
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Trade (even unfair trade) might not be a zero sum game, but that doesn't mean it won't create winners and losers. Case in point is one country applying unfair tariffs to deter foreign competition while getting freer access to other markets.
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Title is clickbait (Score:4, Insightful)
In the summary it clearly states that this isn't particular to US companies only. It says "The 3% tax would apply to the French revenues of roughly 30 major companies, mostly from the U.S".
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Re: Title is clickbait (Score:4, Informative)
Revenue is a lot harder to hide than profit. Profit you can subtract with "investments", but revenue has to be recorded in the books as is. And since the revenue will also be available from all the French companies that do business with Google, it will be difficult indeed to hide. Finally, massaging the numbers of the profit is a grey zone in many cases, but massaging the numbers of the revenue is a black and white felony.
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20% of profit
3% of revenue
Unless you have profit margins of 15% (or higher) you actually pay more with the 3% rate.
Sad... (Score:3)
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Ok, I know I can tend to let my sentences go from time to time, but you really need to break these up a bit. Commas and conjunctions, periods, semicolons: these are all your friends. Learn to use them. Learn to love them. You want small complete phrases in order to be easy to read and understood. Your sentences have a lot of junk in them that is just not necessary to get your point across, and are often missing context.
I'll help out with your first sentence:
Don't bother replying to "That YouTube Guy". He is
A good move for France (Score:5, Interesting)
A top line revenue tax on companies in France is a good thing. It prevents companies from jurisdiction shopping just to avoid taxes. It also avoids the paper shuffling gimmicks companies use to avoid paying taxes.
Main point is that it is transparent as to how much revenues are made in France and how much tax is paid.
Makes businesses stop thinking about how to shave taxes by accounting tricks and think of how to increase revenue.
Companies make many life changing decisions via HR actions just on the basis of tax implications or regulatory impact - witness highly compensated and its ceiling on wages for most technology workers.
Re:A biased move by France (Score:2)
When the legislation was crafted specifically to penalize US companies and (with one exception) to exclude any French companies, no it's not a good move, it's a move that no US president can allow unanswered and there will soon be WTO sanctioned reprisals.
There is a reason why this legislation was refused by the EEC when it was proposed: WTO rules forbid attempting to bias competition by taxing foreign companies and giving local ones free passes. The legislation was narrowly crafted to only impact GAFA
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and (with one exception) to exclude any French companies,
French companies are not excluded, neither are other EU companies.
That would be against the constitution ...
get French wines hit with WTO sanctioned tariffs ...
The WTO does not take tariffs
Translation: Tax on US consumers (Score:5, Insightful)
Look, tariff wars never work, mostly because it's a tax on US consumers. France basically will just think we're crazy, and have no understanding of economics, and they'll be right.
A genius found in a stable would know that.
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How the fuck is this a tax on US consumers? This tax is on operations within France, so it impacts French people not US consumers.
It may impact American companies but it only affects their French revenues, so still fuck all impact on US consumers.
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France, obviously, will win.
They have real people who understand trade.
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There must have been a reason you were purchasing the French goods in the first place.
They were cheaper or better or something. You have still disadvantaged yourself in some way but not having the French goods. Or why not already purchase the alternative?
(Also, without French competition. Whose to say the competitors won't just take the opportunity to raise prices as well. )
Bullshit ... (Score:5, Insightful)
Sorry, but why do Americans believe American Corporations should be able to operate in a country and not pay taxes in that country?
No, you don't get to claim you made no revenue because you shuffled it around through other corporations.
America needs to understand that the rest of the world doesn't think you or your corporations are special and deserve to be allowed to do as you please.
US trade policy under Trump is a joke, but it lays bare the bullshit we've all known for years ... Americans and American Corporations want to do business in other places, but don't wish to play by their rules.
Don't like it, fuck off and go away.
France is right, they have the sovereign right to tax revenues made in their country.
Re:Bullshit ... (Score:5, Informative)
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All the while insisting they actually do pay shitloads of taxes, but never get credit for it. Boo hoo.
I'm just waiting for people to show up in this thread crooning that things would be better if we abolish all corporate taxes.
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But...but that's what they do in the US.
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Sorry, but why do Americans believe American Corporations should be able to operate in a country and not pay taxes in that country?
Nice strawman. No one is saying that.
The concern is that the law, as written, disproportionately affects American companies. It says something like "companies with revenue greater than X" pay this extra tax. But... how was X determined? It might be that lawmakers solved for X such that it maximized the number of foreign companies it targeted and minimized the number of domestic companies. I don't know, but THAT is the issue, not that we believe these companies should not pay appropriate foreign taxes.
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It says something like "companies with revenue greater than X" pay this extra tax.
The revenue, you know, is in the low 2 digits million range.
It basically hits every European company, too.
Re: Bullshit ... (Score:2)
I just learned that France will be enacting this tax even on companies that do not have a physical presence in France. Isn't it unusual to try and tax a company that does not operate in your jurisdiction?
What would they do if Google refused to pay the tax?
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nice post. All you ever see on slashdot is the same old "USA single handedly saved the world" nonsense. Mostly people attempting to rewrite history.
Your post is refreshing.
Add 30% tax on France wine (Score:2)
Problem solved in 1, 2, 3...
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No. The equivalent would be a tax on all wine - France isn't taxing by nationality.
Is this really so fucking hard to grasp? I guess so, the number of clowns posting about fucking wine.
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I'm guessing OP drinks box wine, or Budweiser.
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You know there are good wines made by manyyyyy other countries.
Once more into the breach (Score:2)
Again, this is a new industry with new revenue, and as such is not about "paying your fair share" but rather how much voracious government can take in from new streams that didn't exist before (and, btw, which they hampered domestically by allowing lawsuits of hosts where guests post copyrighted material, which the US gave safe harbor to if they removed it promptly, allowing the US companies uniquely to become gigantic).
I'm ready for my downmod, Mr. DeMille.
Internet companies pay less tax (Score:5, Informative)
The European Commission has estimated that traditional companies typically pay around 23 percent tax on profits, compared to between 8 and 9 percent for internet firms, some of which pay little or no tax at all.
Not only American tech giants... (Score:5, Informative)
The new tax is not targeting specifically America, it target all the Tech industry, which is dominated by American companies.
It similarly applies to French and European companies as highlighted in a first (non-comprehensive) list shared in the scope of the review of the law: Airbnb, Alibaba, Amadeus, Amazon, Apple, Axel Springer, Booking, Criteo, Ebay, Expedia, Facebook, Google, Groupon, Match.com, Microsoft, Rakuten, Randstad, Recruit, Sabre, Schibsted, Travelport Worldwide, Tripadvisor, Twitter, Uber, Verizon, Wish et Zalando. source in french: https://www.rudebaguette.com/2... [rudebaguette.com]
I'm amazed all the news is focused on "GAFA".
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It similarly applies to French and European companies as highlighted in a first (non-comprehensive) list shared in the scope of the review of the law: ...Match.com...
The fucking fuck? How does match.com have global revenues of 750 million euros and revenues exceeding 25 million euros in France?
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Real genuine climate action is about empowering people to live clean energy efficient lives through tax breaks and subsidies.
Where do you think the money from these subsidies will come from? That's right, from other taxes.
And if you do some tax breaks, well, you have to raise some other taxes to continue to offer the same services.
The state is always going to tax. So instead of taxing work, imports or consumption, it's preferable to tax pollution instead.
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On the contrary, idiotic right wing radio oppose carbon taxes. I support those.
Even if we cancel subsidies to petroleum companies, that's not going to be enough. We must still tax, or discourage some other way, CO2 emissions.
The UK is launching a similar tax of 2% (Score:4, Informative)
The U.K. is pushing ahead with its plan for a 2% Digital Service Tax [bloombergtax.com] on the digital revenue of tech giants like Apple Inc. and Facebook Inc. in its draft finance bill for 2019-20.
Where is the "warning"? Where is the "threat"? (Score:2)
“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” said U.S. Trade Representative Robert Lighthizer. “The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”
Seems quite reasonable to me.
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If it is reasonable, how are we to become righteously indignant over it? Come on, consider your audience...
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no, not reasonable at all since the law does NOT target U.S. companies but applies to UK, China, Germany and Spain.
The law specifically taxes "companies using consumer data to sell online advertising, have annual global sales of over 750 million euros, and revenue exceeding 25 million euros in France."
No mention of USA in there at all
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Ii implies the US will take action against the country. That's LITERALLY the only reason to investigate another country tax decisions.
Grow up.
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What was the origin of desktop French computing? Getting sold into gov education by the gov.
Consumers given the freedom to shop around quickly moved to the quality and innovation of advanced US designed computer products/services.
Let users all over France enjoy great US computing products without a huge new gov tax.
Price of Success (Score:3)
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3% is nothing (Score:2)
However, I still think that France (and all nations) need to collect a sales/vat tax on all goods that go over the borders and it needs to be collected by the delivery service. Right now, few collect and none are by delivery services.
How the internet created a global trade war (Score:3)
How the Internet created a global trade war [aardvark.co.nz]
From a New Zealand perspective.
While the US innovates (Score:2)
The French consumer voted on the online US designed products and services they like.
Generations went with fun/innovative Apple and MS over educational Groupe Bull, Thomson.
"Computers for All" quickly became new US computers for everyone.
Later people all over France enjoyed US web-based services.
The French gov responded with more and more tax.
France had its chance to do computing in past decades.
France did not win over users and the users selected advanced US desk
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No. As a US consumer, I do not want to pay 3% more for French wine so French citizens can have more services out of their government. Instead, raise the price on French Citizens by 3% for those goods and services they buy from those companies, and then sue when the same taxes aren't applied to all their domestic competitors. You can't unfairly tax people by picking and choosing the losers, You should tax everyone fairly.
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or they (the french) could just say its for National security
Goosey , goosey , Gander.
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Re:Slap 3% on French Wine (Score:5, Informative)
You can't unfairly tax people by picking and choosing the losers, You should tax everyone fairly.
What's unfair with this tax? It applies to all corporations, not just US, as long as they sell over a certain threshold. Seems totally fair to me.
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When the thresholds were narrowly crafted so that U.S. companies get hit but no french companies do, it's a problem. Slightly tweaking the conditions so that a single french company gets hit too is fooling no-one especially when it's been playing out in the french press openly for the last 18 months.
It's just as "fair" as determining taxes by the first letter of the country they are incorporated in and then "randomly" picking F as the letter with the highest tax rate. France is going to get slapped down har
Re: Slap 3% on French Wine (Score:3)
It would be like whining that the top income tax bracket is racist because it has been crafted to include mostly white man.
Corporations under the threshold already pay some other taxes in France. Only the big ones have the means to evade. I hope my country is going to do exactly like France.
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This is not fair because those big corporate don't pay their share ; small business do (because they can't do otherwise).
It's not fair but it's better than nothing ; I wish the tax increase over time to reach an acceptable level.
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What bias? Most taxes are "biased" against those making money. Of course if you don't sell anything in France you are not taxed. I don't see any problem with this tax.
Re:Slap 3% on French Wine (Score:4, Insightful)
Only "fair taxes" are the whole point...
Companies based in france have to pay french taxes, but large companies can afford to be "based" in a tax haven and only pay their (much lower rate of) taxes there, despite earning significant revenues in france.
Small companies and individuals don't have that option.
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Depends on the revolution. Though, honestly, I think most of us here are pretty middle-class, so we're screwed no matter what revolution it is.
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Re:Slap 3% on French Wine (Score:5, Insightful)
Yeah, and no ad sales within France either. Google is not going to leave France because of a 3% tax.
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A bad idea, but not a huge deal in the grand scheme of things.
As it's a tax on revenue from France, Google just needs to add a 4% surcharge on all charges to anyone located in France. 3% for the government, 1% more to cover the cost to Google of administering France's new tax on its residents.
Re: Slap 3% on French Wine (Score:3)
Google is totally free to raise prices by 4%. Or why not 400%?
It's only going to make it less competitive against other ads providers. Including local newspapers which have to pay real taxes, a lot more than this 3%.
Re: Slap 3% on French Wine (Score:5, Insightful)
and just serve the French customers from outside the country?
Google's French customers are the companies that publish ads.
And they will want a French tax invoice, which will require Google to maintain an office in France.
I guess we'll see if Google is as ready to forgo its France revenues as you are.
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French companies can't do business with businesses outside of France?
What stops Google (I can't believe I"m arguing for google here)....from having servers, offices, etc...all outside of France's borders, but still within the EU....and sell ads to French businesses, yet never have to set foot in the country and pay those taxes.
Re: Slap 3% on French Wine (Score:5, Insightful)
What stops Google (I can't believe I"m arguing for google here)....from having servers, offices, etc...all outside of France's borders, but still within the EU....and sell ads to French businesses, yet never have to set foot in the country and pay those taxes.
1. Google operating within France, even if not located physically there, requires that Google follow applicable French law. Whether Google has a physical presence or not there is irrelevant. This is the reason websites based in America are following GDPR regulations. Small websites and services that no one will go after can ignore this, but Google is not a small service and will not go unnoticed. Pissing off France this way will likely have ramifications.
2. If Google violates French law blatantly, France may "prosecute" via EU channels, which would be far worse for Google and all the other tech giants.
3. Trump is an idiot, and doesn't understand the French. The French do *not* respond well to threats. Brandishing increased tariffs guaranteed that they would pass the law if only to show him up.
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The ONLY US companies bothering to adhere to GDPR regulations are the ones that also have a physical presence IN the EU.
IF they aren't physically there, they don't care and there's nothing an EU country can do about it.
Seriously, what can th
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Arrest company employees for tax evasion or other charges when they enter a territory that extradites to France?
You know, like how the US likes to think it has legal jurisdiction around the world for gambling sites which serve US customers? None of this is exactly unprecedented...
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Under EU rules, they can simply produce an irish tax invoice in euros... Single market, single currency and all that.
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The more likely scenario is "we'll see if France is willing to lose it's largest market for wines when the WTO rules that the legislation was specifically crafted to hit American companies and authorizes punitive tariffs".
Trump is a blustering idiot but with the evidence that's been openly playing out in the french press over the past 18 months, he won't even have to try to win this one.
Re: Slap 3% on French Wine (Score:2)
Unless the WTO is totally corrupt, there is no way it is going to rule against France on this.
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No, but the French company that you ordered it from had to register that product as sold to you, and that information is available to the French IRS.
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Yeah, well...good luck on them collecting taxes from a company with no presence within the borders of their country.
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Windmills do not work that way!
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Good thing there are plenty of places left inside the EU, but outside France.
For example, Belgium. You know, where the EU Parliament meets?
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Strasbourg is now in Belgium?
Re: Slap 3% on French Wine (Score:2)
Sure you can.
If I have info about EU citizens on my hard drive, what the fuck is the EU going to do about it? Invade my country, track me down and take my HD?
Re: Slap 3% on French Wine (Score:2)
Collect the taxes from the citizens.
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It's unfortunate that "government taxation" is the chosen solution.
Maybe start a competitive business that speaks to EU values and needs, and put these companies in place by doing a better job? No, that's far too much work and would make for a better market for all. Way easier to just try to take an extra taste via taxation and not actually solve any of the issues you mentioned.
Short version: this is nothing but a greedy money grab, and doesn't actually solve a god damn thing about privacy or "the overall
Re:Europe getting tired of US "big tech" (Score:4, Insightful)
Taxes are used for the social good. That's literally the point of taxes.
What a bunch of whiny hypocrites around here. (Score:3)
On the one hand, post after post complains about China having an unfair advantage. Such as low wages or lax regulations. Levelling the playing field with government subsidies, tariffs and interventions are all good, wonderful and patriotic.
But when the French don't like french companies competing unfairly with low (no) tax foreign companies. Suddenly government subsidies, tariffs and interventions are all evil money grabs by the dirty Euro's.
A French company in France selling exactly the same thing woul
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Haven't RTFA
What, you haven't read the article, and haven't gone balls-to-the-walls MAGA over the headline? Are you sure you're on the right website?
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I'm not going to read it either.
This is a tax on revenues, not profit.
Going with Google, this will mostly be a tax on advertising and any other revenues. France will have to trust the company to report faithfully (they will, European legal fines can be steep, a good thing).
I'm not sure what my "other revenues" means as I only use their free services (with ads). I'm sure there are corporate and probably individual level paid services available, money other than ad revenue.
Now then, Amazon Web Services and
Re:They have no one left to TAX (Score:4, Interesting)
Congratulations for the least educated post of the day.
EU doesn't have laws on taxation itself. The EU has collaborative tax laws regarding international trade, i.e. discrimination between consumers/workers/businesses on a national level, unfair competition between businesses on a national level (as is sometimes brought up with Airbus being supported by the state), and the free flow of goods.
Any country within EU can set any tax level they want. France can tax its citizens 130% (a strange phenomenon that actually happened in Sweden in the 70s) or 1%. France can set the Google tax to 1,000% and it would still be fine. What France cannot do according to EU law (and the same goes for Ireland) is shield a company from paying taxes in other countries if that company is formally based in France, or help that particular company compete internationally.
You are wrong on everything you have said. Every nation in the EU is sovereign and sets its own tax laws and the union has no say in that, though its members may raise discussions about it.
I shall end this with a quote I'm getting surprisingly much use of today.
Ignorance more frequently begets confidence than does knowledge
- Charles Darwin