From Thailand To Indonesia, Taxes Tighten for Digital Businesses (nikkei.com) 8
Governments across the Association of Southeast Asian Nations are moving to impose more taxes on digital companies, stirring unease among multinational internet businesses that have boomed amid the coronavirus pandemic. From a report: From Thailand to Indonesia, new levies have kicked in or are being introduced. They threaten to chip away at the earnings of technology companies that are reaping benefits from the rise of digitalization among the region's 650 million people. The measures are part of global moves by governments to try to bring more of the borderless digital economy into the tax net, responding to scrutiny of whether often footloose tech companies are paying appropriate dues on their earnings. Tech companies have already been the target of digital service tax nets that have progressively tightened in several European countries. Authorities in France this week started sending payment requests to U.S. technology groups for a new digital services tax, the Financial Times reported.
The Organization for Economic Cooperation and Development is trying to address the issue at a multilateral level with efforts to reform international taxation rules, governing how multinational businesses pay taxes in the countries where their consumers or users are. Tax experts say corporate income tax liability is normally assessed where a company has its physical presence but not in overseas markets. That has led to a perception of an uneven playing field, with local providers of digital services being taxed by their governments while foreign competitors escape the net. While the OECD works to hammer out an international digital taxation framework through negotiations with over 130 countries, several in Asia have moved ahead to implement their own rules.
The Organization for Economic Cooperation and Development is trying to address the issue at a multilateral level with efforts to reform international taxation rules, governing how multinational businesses pay taxes in the countries where their consumers or users are. Tax experts say corporate income tax liability is normally assessed where a company has its physical presence but not in overseas markets. That has led to a perception of an uneven playing field, with local providers of digital services being taxed by their governments while foreign competitors escape the net. While the OECD works to hammer out an international digital taxation framework through negotiations with over 130 countries, several in Asia have moved ahead to implement their own rules.
The double edged sword of taxing internet business (Score:2)
Taxing overseas internet businesses gives an advantage to smaller, less traceable businesses which are less easily taxed. This will only drive more and more business out of the hands of big players and into the hand of smaller businesses - which is a very good thing.
So far, the main bottlenneck has been money: all monetary transactions pass through tightly regulated channels controlled by central banks. That means a small business being accosted to collect sales tax or enforce some foreign regulations often
Re: (Score:1)
The law in France was carefully crafted to tax American companies while giving French companies a pass. It was naked protectionism.
Re: (Score:3)
From Thailand to Indonesia, new levies have kicked in or are being introduced. They threaten to chip away at the earnings of technology companies
Awww, those poor multibillion-dollar corporations, their ability to make massive profits and pay little to no taxes will be impacted. My heart bleeds for them, it really does.
Not just overseas, but in the US as well (Score:4, Interesting)
Some states offer free rate lookups, but most force you to purchase a package from a third party, costing thousands just to find out how much money you owe to the state. Not an easy deal for a small company.
So forget overseas, it's happening in our own backyard (if you're in the US).
Re: (Score:2)
Re: (Score:1)
From Thailand to neighbor Indonesia? (Score:2)
Tax the Advertisers (Score:2)
They are the generators of their income and they advertise usually local companies you can send the brute-squad to if they don't pay up.