back to article European nations told to sort out 'digital tax' on tech giants by end of year

Warring European governments have been urged to quickly come to an interim agreement on a levy on tech giants’ revenues – and could drop plans to tax the sale of users’ data to get there. The Austrian presidency of the EU is pressing for member states to agree to a temporary solution for the bloc. The presidency is reported to …

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  1. John Robson Silver badge

    Surely you tax adverts...

    ... at the point of display, not sale.

    FB et. al. Know exactly where their ads are displayed, and how much each has cost an advertiser. So tax it at that end instead.

    1. Jellied Eel Silver badge

      Re: Surely you tax adverts...

      FB et. al. Know exactly where their ads are displayed, and how much each has cost an advertiser. So tax it at that end instead.

      They know, but for the UK, HMRC doesn't.. at least not without an expensive audit. Which is one possible solution, ie a scratch & sniff test to publish enough accounting info to allow tax authorities to determine if there's a fishy sandwich involved.

      To me, the issue is that multi-nationals can create tax efficient structures to reduce tax. So a UK sales agent takes an ad order from a UK advertiser to serve ads to UK consumers loses money in the UK (or just about breaks even) because that sale really goes via Ireland. And with the old Irish Apple, via an empty office in Ireland. And by contriving business processes to shift money around, large companies can avoid tax, but smaller competitors can't.

      Governments have been chipping away at some tricks like the interest rates charged on inter-company debt, but much more is needed to create any kind of level playing field.

      1. John Robson Silver badge

        Re: Surely you tax adverts...

        HMRC doesn't - but they aren't all taxed done by declaration in the most part anyway?

        Shouldn't be that hard to audit

        It's all in the sales - some percentage of adverts that aren't geographically limited, and all the revenue from those which are limited to UK users/geographies

  2. LucreLout Silver badge

    Start with the basics and work from there

    pay their fair share

    Before everyone gets emotive and irrational, hows about the EU/Austria first define "fair".

    Unless there's first an agreement on what fair is then dreaming up taxes and ways to spend them simply won't achieve anything.

    1. Peter2 Silver badge

      Re: Start with the basics and work from there

      Before everyone gets emotive and irrational, hows about the EU/Austria first define "fair".

      That was done about a quarter millennia ago. The company pays the country x% of profit (X% varied, but was around 10-25% depending on which country) and in turn the country could afford to build and maintain roads, hire police forces to prevent highway robbery, educate the populace and later to provide things like healthcare and pensions.

      Companies decided that they could find and exploit loopholes and not pay their taxes, and all of a sudden are competing on how little tax they can pay. If you were defining "unfair" then this is probably it.

      1. Anonymous Coward
        Anonymous Coward

        Re: Start with the basics and work from there

        What is "Fair" is exactly the point. These companies are still paying the relevant percentage of their operating profits, less any other allowances they can find. They can't afford to break the law, nor do they have to - the existing loopholes give them plenty of wiggle room to minimise their tax bills anyway. Smaller companies lose out because they can't afford expensive accountants to find all the same little loopholes, or more frequently because they are pinned down to a real physical location and no means to move profits off shore. The fact that you think the current situation isn't "fair" is proof that the issue still isn't settled, let alone a quarter of a millenia ago.

        Taxing revenue rather than profits is a rather blunt instrument, which could be rather problematic. If that were applied to some industries and it would be enough to send everything into the red immediately. However, at least it's a proposal to actually do something rather than just the usual political hand wringing about the moral conduct of big businesses - that's just a waste of everyone's time.

        1. LucreLout Silver badge

          Re: Start with the basics and work from there

          Smaller companies lose out because they can't afford expensive accountants to find all the same little loopholes, or more frequently because they are pinned down to a real physical location and no means to move profits off shore.

          Two towns over from me the cafe there is based offshore for accounting purposes, despite having a decidedly onshore physical presence. Its a very small business - I know contractors with a higher turnover (they're very specialised, I admit).

          The game is not nearly so diffcult to understand or expensive to play as you imagine. Oddly though, nobody seems worried about their use of the same planning as the tech giants....

      2. LucreLout Silver badge

        Re: Start with the basics and work from there

        That was done about a quarter millennia ago.

        Correction, that was dictated about a quarter millenia ago, when international operations were exceedingly difficult to manage because of transportation speed/cost and the snail pace communications systems. The world has changed and governments, having lost the respect of the people, are not in a position to dictate.

        So, given the world today, and the waste in existing governmental spending, define fair?

        in turn the country could afford to build and maintain roads, hire police forces to prevent highway robbery, educate the populace and later to provide things like healthcare and pensions

        Which neatly accounts for about 10% of the tax take. The rest they fritter away and waste.

        You're confusing emotional irrelevancies, such as the public services you'd like someone else to fund for you, with what is fair or even realistic to expect companies to pay. A given company may have shareholders in 200+ countries around the world - how much do you think they value public spending in, for example Ireland, if they live in Uganda?

        Companies decided that they could find and exploit loopholes and not pay their taxes, and all of a sudden are competing on how little tax they can pay. If you were defining "unfair" then this is probably it.

        Unfair would better be defined as forcibly extracting from someone, using menaces, threats of impriosonment, and life altering sanctions, that which they would otherwise not give voluntarily. Which is the basis of all taxation.

        What is fair about asking a company headquartered in say America, to pay taxes for services you wish to enjoy but otherwise cannot afford in the UK? What is fair about asking their global shareholders to pay for it? Sorry, but you haven't arrived at anything remotely resembling a working definition of fair, and so cannot use it for a predicate to raise taxes.

  3. Mannp

    "The OECD is working on a global solution to the issue..."

    if you believe this than you need help

    the oecd is controlled by USA and it will obviously not do anything against...US companies

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