back to article EU tech tax talks teeter on brink – reports

Hopes that European countries will imminently agree on measures for a digital services tax are foundering – but G20 nations have been told a global consensus is still possible by 2020. Finance ministers are due to meet tomorrow to debate the matter, which has seen member states split over whether, and how, to claw back more …

  1. codejunky Silver badge

    Erm

    "to claw back more cash from tech giants whose business models pose a challenge to national tax authorities"

    To claw back suggests it was the authorities in the first place. The authority isnt providing the popular service that people want, it is the business.

    1. DavCrav Silver badge

      Re: Erm

      Oh do fuck off with your free man of the land arch-libertarian Ayn Rand bullshit. Governments are necessary, especially in Europe where they do nice things like look after you when you are ill. Yank (among others) piss-takers are jeopardizing the whole of our welfare state, and we don't want to end up like you.

      1. codejunky Silver badge

        Re: Erm

        @ DavCrav

        "Oh do fuck off with your free man of the land arch-libertarian Ayn Rand bullshit."

        Eh? So you dont believe in private property?

        "Governments are necessary"

        Did I say they wernt?

        "especially in Europe where they do nice things like look after you when you are ill"

        In this case the suggestion is stealing more which I assume you dont care as long as they do nice things for you? Of course that would suggest they are not stealing from you but others so you dont mind.

        "Yank (among others) piss-takers are jeopardizing the whole of our welfare state, and we don't want to end up like you."

        I am not a yank. I have nothing against Americans but I am not in or from the US. I am in the UK where our gov is currently sucking tax at a 50yr high (as a percentage of GDP) and grasping to take more. We also keep hearing we are in austerity which is rubbish. Enjoy-

        https://www.continentaltelegraph.com/your-tax-money-at-work/there-is-no-austerity-in-the-uk-tax-take-at-50-year-high/

        1. Anonymous Coward
          Anonymous Coward

          Re: Erm

          @codejunky

          What is fair? That is the question. Should we pay tax while corporations shift it around and pay none or move it to a country with the lowest rate?

          I honestly don't know what you are getting at here? It sounds like you think corporations should be able to do what they want when the money has been spent in the UK. If the government is misusing it then that's up to us as the electorate to sort that out.

          Regardless unless all EU tax laws are aligned it will never work and that's not going to happen.

          1. codejunky Silver badge

            Re: Erm

            @AC

            "What is fair?"

            Tbh I hate that question, just as asking what is moral. Both are woolly words that actually have no meaning and can be used to support either side.

            "Should we pay tax while corporations shift it around and pay none or move it to a country with the lowest rate?"

            That is actually a good question. The opposite side of the same coin is should the government be allowed to steal all it wants from whoever it wants and abolish private property. A government will always want more money, thats not really something disputed by many (even if it took 100%). All tax ends up falling on the smaller, the poorer. So if there is no private property then the gov can take what it wants from whoever for whatever reason (window tax for example). Or do we have private property to which the gov can only take as we are willing to pay for the services we deem them necessary for?

            Also a corporation isnt a person. And it is people who consume and so use money, so there isnt a tax on corporations, only a tax on the people which includes shareholders down to the lowest paid worker. Taking money from the economy (tax) literally takes away from the economy, while these corporations are not hoarding it in some vault- it is in the economy and improving lives.

            "It sounds like you think corporations should be able to do what they want when the money has been spent in the UK"

            You dont? I dont know your salary, but its too much. So lets cream some more off the top because I can spend it better than you can (the government approach). And of course you saying no is just greed and it is pretty likely you are in the top global 1% (you live in a developed country you probably are even on minimum wage) proving you need more taking. And we can even talk smack about how you obviously dont care about people or whatever (its all rubbish but a good excuse to steal from you.

            Or as I am saying, the gov has no right to steal from you. Your private property is your private property regardless of my personal opinions of you. Because if you can be made such a victim so can I and those I care about.

            "If the government is misusing it then that's up to us as the electorate to sort that out."

            That is pretty much my argument. This is an abuse against success. People choose to use products and services from those businesses and are free not to. The gov is getting green eyes over someone elses success. I consider it very dangerous when it should be us who decide, not them.

            1. Anonymous Coward
              Anonymous Coward

              Re: Erm

              "a corporation isn't a person"

              You just the nail on the head with that one. That's why they are never held to account for their actions regardless of what they do.

              You're also preaching to the wrong person, I'm a kind of socialist. I would be more than happy to pay more taxes if it helped others less well off. Don't get be wrong I'm not a Corbyn (though he has some good ideas) or communist supporter but capitalism doesn't work in it's current form. This world is now based on greed and in the end it will eat itself. When a person can't do one job and support themselves let alone a family then something is very very wrong.

              None of this is abuse against success, success is fine but when people horde money just the sake of it then it doesn't work or are we going to talk about the non-existent trickle down economy?

              People have different view points, you have yours, I have mine however when it all goes tits up don't say I didn't warn you.

              1. LucreLout Silver badge

                Re: Erm

                You're also preaching to the wrong person, I'm a kind of socialist

                There's only one kind of socialist: An idiot.

                Socialism has failed everywhere and everytime it has been tried the whole world over. The only system that has ever actually lifted people out of poverty enmasse is capitalism. Capitalism works. Whatever replaces it won't be the intellectually and morally bankrupt failures of the past (socialism and communism).

                capitalism doesn't work in it's current form

                Capitalism is fair. One set of rules to the game and equality of opportunity for all. Equality of outcome (socialism) is not only a pipedream that can never work, but it is also deeply destructive, unfair, and frankly, highly undesireable.

                Capitalism is why the western nations make up the richest portion of the world. Socialism and dictatorships are the primary reasons the rest of the world is poor.

                or are we going to talk about the non-existent trickle down economy?

                Yawn. This. Again. Trickle down economics does not mean that because I may be a millionaire this year, you will be a millionaire next year, without making significant sacrifices and effort.

                Trickledown economics means that because I earn whatever I earn then spend some in a restaurant, the waiter, chef etc all get to earn whatever they earn. Further, that because of hedonic regression, the lifestyle available to you on an average wage is likely to be better in places than the lifestyle available to yesterdays rich man - in door plumbing was not available at any price 400 years go. Todays Fiesta with Mountune pack is faster, more reliable, and more practical than the rich mans Ferrari of the early 80s.

                I realise this is directly in opposition to whatever your union rep may tell you, but there's a reason why they're a union rep and not working in a very successful (and lucrative) career in the City. I understand this stuff a tad better than they do.

              2. codejunky Silver badge

                Re: Erm

                @AC

                "That's why they are never held to account for their actions regardless of what they do."

                Except they are taxed as if they were a person and it is the people and economies which suffer for it. And in what way are they not held to account for their actions?

                "You're also preaching to the wrong person, I'm a kind of socialist."

                Actually you replied to my comment but as a socialist your perspective does make sense (I dont mean that in any funny way). I obviously am not socialist.

                "but capitalism doesn't work in it's current form"

                Worryingly that is a terrifyingly wrong statement (assuming I understand you). First the desirable countries are capitalists and free market. At the current rate actual poverty could be wiped out globally in our lifetime. Basically it is the capitalist and market based economies which are the most desirable, successful and world leading in progress.

                "This world is now based on greed and in the end it will eat itself"

                That I would agree with. However the more staunchly socialist approaches (of the Corbyn, Venezuela, USSR) have eaten themselves in short timespans. Your comment about supporting oneself and their family is extremely visible in those staunchly socialist countries.

                "None of this is abuse against success, success is fine but when people horde money just the sake of it then it doesn't work or are we going to talk about the non-existent trickle down economy?"

                Where is the hoarding? Assuming they put it in a bank it is lent out. If they buy assets they spend it. Unless they lock it away in a vault (where it is inflated away) they are not hoarding and if they do they lose money. That money being spent in the market economy which rewards productive and successful business makes everyone richer. However collected by a government is spent how a government wishes to spend it and is a drain on an economy.

                On trickle down how do you think it doesnt work? You have a computer. I assume a car? A mobile? Your groceries are a small percentage of your income? You have white goods? Medical care? Light? Heat?

                "People have different view points, you have yours, I have mine however when it all goes tits up don't say I didn't warn you."

                Thats cool. It is nice to debate with someone with a different perspective but reasoned. We are unlikely to see eye to eye but we are all free to our opinions and such differences make for interesting conversation.

          2. LucreLout Silver badge

            Re: Erm

            Should we pay tax while corporations shift it around and pay none or move it to a country with the lowest rate?

            In the really real world, where people are fundamentally competetive rather than cooperative, then what we should do is lower corporation tax to increase our slice of the global pie. Counterintuitive as it may be, from where we are on the laffer curve, the only way to increase the tax take is to lower taxes. Squeezing harder just chokes the life out of the economy, which is what we've been witnessing this past decade or so.

            If the government is misusing it then that's up to us as the electorate to sort that out.

            Unfortunately the electorate won't, because the don't understand economics or finance. On average, the electorate are stupid.

            Regardless unless all EU tax laws are aligned it will never work and that's not going to happen.

            What possible benefit do you see in aligning EU tax laws? Absent global cooperation, the only way to increase your corporation tax rates isn't with more aggressive collection, it's with a globally competetive rate. Even if all the EU aligned, people would still funnel revenue off shore. You can't tax a loss.

            I work in tax arbitrage for a living and so I can pretty much guarantee I know a lot more about this than any other commentard. There is one other who posts, whom I won't name, that gives away a deeper understanding than the others, deep enough that I suspect an industry peer or colleague.

            Codejunky has things pretty accurate. Tax is taken from the private sector employees and spent on public sector employees and infrastructure, in the main. The money doesn't belong to the tax man, it belongs to the individual or company earning the money. The tax is forced sequestration. You can argue about the extent of the need for taxes (too much waste/need more investment), but arguing about what tax is remains futile and wrong.

            If tax were spent efficiently and correctly, payment of it would be voluntary. That it is compelled with menaces rather gives away the game as to how wisely the people paying the tax consider it is being spent.

  2. DavCrav Silver badge

    "If an international deal were struck by 2020, the UK's proposed tech tax wouldn't come into force – which has led some to question whether it is worth the government's time consulting on, and drawing up, national proposals when it already has a packed legislative agenda."

    The purpose of unilateral action is to encourage the OECD/G20 to get their finger out. If nobody says we're going to do it anyway, the Americans can keep stalling and nothing gets done.

    1. LucreLout Silver badge

      The purpose of unilateral action is to encourage the OECD/G20 to get their finger out. If nobody says we're going to do it anyway, the Americans can keep stalling and nothing gets done.

      Last time this thread came up I explained at length why nothing (positive) is going to get done with the DST or rEU variants. Only an OECD level setup might work. That post is quoted at the bottom of my reply.

      There's already so many loopholes in the DST proposals that those of us in the field are already so confident that we can structure around it that our only concern is the cost to the country of trying to make it work and inadvertently walloping domestic firms that were never the intended targets.

      Any content publisher (Oxford press etc) will have content, a search engine, and users. They're far more likely to be hit with DST than Google is.

      We will literally be spending a lot of money developing and trying to collect this tax, and we'll never raise more than it costs us. It's a waste of money on political engineering.

      ----------------------------------------------------------------------------------------------------------------------

      Some facts:

      1. DST is only intended to run until OECD/G20 tax comes in.

      2. DST is in consultation with a 2020 implementation date.

      3. OECD is in consultation also with a 2020 implementation date.

      4. DST has a "safe harbour" exemption for those of a loss making persuasion.

      5. There is no requirement to have a legal entity registered in the UK in order to have a web site accessible from the UK.

      6. DST is intended to raise £400M

      7. We have no means of determining how much Google makes from UK search Vs its Android division or any of the other letters in the Alphabet Soup.

      Thus, we can determine the following opinions:

      DST will cost the Treasury a lot of money (fact 1) and in all likelihood raise nothing because we'll implement OECD by the time DST is ready (facts 2 & 3).

      Amazon won't pay a penny in DST because it makes a loss (facts 4 & 7). Google can probably restructure to achieve the same thing (facts 5 & 7). Apple might take a hit, but barely; we can't actually force companies to register for some type of self assesment by which we could calculate their DST if they don't require a physical presence here.

      They're avoiding what is frankly a trivial tax split between even just the 4 main players (fact 6).

      It makes for a good announcement but will in all likelihood either only raise revenue from unintended targets (How many web sites have a search feature that isn't google? Digital publishing step right up), or would in any case raise less than MPs spend on their pensions.

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