back to article European Union divided over tax on digital tech giants as some member states refuse free money

European efforts to implement a digital sales tax have stalled after Ireland, Sweden and Denmark yesterday stood firm in their refusal to approve measures aimed at scraping more cash in from tech giants. Governments are engaged in an ongoing battle over how to tax tech giants that often have little or no physical presence in a …

  1. anothercynic Silver badge
    Facepalm

    Enough said...

    ... If at least one US legislator has already cottoned on, expect others to too. And yes, this is *exactly* what I referred to 2 months ago (go and cruise through my previous responses, it's in response to member 'Arthur the Cat'). What goes for the goose goes for the gander. Ireland knows which side its bread is buttered on, and Sweden (especially them) and Denmark and others are also getting a glimmer of what this may mean to their own digital giants. Spotify and Soundcloud are both Swedish and are exceptionally popular; so you can see where this could go if/when the US retaliates against the EU's digital services tax.

    1. I ain't Spartacus Gold badge

      Re: Enough said...

      Are either Spotify or Soundcloud all that profitable though? Google and Facebook pay very little corporation tax, but make large profits. I guess we can also include Apple here - but I don't know if they count - but I suppose all those iTunes revenues might. Amazon are also now starting to churn out massive profits from their cloudy bits - but still not paying that much tax, which they could justify when they re-invested all their profit.

      The real problem here though is the EU Single Market. It's much more efficient for a company to be able to sell across the whole EU from one single HQ. Especially as it allows small and medium sized businesses to do this. And of course then pay all its tax in its home country. However if all the massive profit makers can base in say Ireland, with corporation tax at half the level of many other EU countries, then not only does Ireland get lots of lovely extra tax, but the larger countries aren't getting any - which they would if they weren't in the EU or the Single Market didn't work this way (but would then be less efficient). Though I'm sure there'd be tax shennanigans to try and offset costs from other bits of the business against those profits, to pay more tax in jurisdictions with lower rates.

      It's a hard problem to solve.

      But it's actaully quite an urgent problem. I don't think it will "save the high street", as online shopping is still going to be cheaper and more convenient anyway. But I've seen an estimate that 80% of the growth in advertising sales for the last couple of years went to Google and Facebook. An awful lot of the media is funded by advertising, and we need a free and independent media if we want to have a working democracy. So not only are Facebook and Google really good at spreading fake news, but they also starve a lot of the people who try to fact-check news of funds.

      1. anothercynic Silver badge

        Re: Enough said...

        @Spartacus, the digital services tax is not on profit. It's on revenue. See this?

        The EU's proposed tax is a 3 per cent levy on firms with a global annual turnover of €750m and annual EU revenue of at least €50m. This would hit around 200 companies and boost member states' coffers by about €5bn.

        The bold is mine. So yes, Soundcloud and Spotify would most certainly fall into this. If the US goes for a tit-for-tat response (which, given the current administration, they are likely to do), both Swedish digital giants would see a fat slice of their profits go to Washington, D.C.

        1. I ain't Spartacus Gold badge

          Re: Enough said...

          anothercynic,

          Thanks. The UK tax, which is actually in the process of being enacted, is only on companies that make profits over a certain amount As well as having large turnovers. It's also only due to be 2%.

          I hadn't realise the EU one wasn't as well designed. Not that it's going to happen anyway, because Ireland will almost certainly veto it - as well as others probably.

  2. Marketing Hack Silver badge
    Holmes

    How about fixing the existing tax code to cover this??

    I don't want to add a tax to large companies that are not or barely profitable. So how about fixing the existing tax laws to get rid of shady tax strategies such as the "Double Dutch Debit", the "Irish Shower", "Lax in Lux(embourg)" and "Nobody ever goes to Jersey, but somehow our multi-billion dollar company is headquartered there"??

    If nothing else, pass an EU wide corporate income tax for specific types of companies that are problematic, so that wherever you operate in the EU these companies pay the same tax. Then we can have companies locate their HQs based on the quality of the local workforce and the local infrastructure and culture.

    1. Steve K Silver badge

      Re: How about fixing the existing tax code to cover this??

      I don't want to add a tax to large companies that are not or barely profitable

      Depends on how (taxable) profit is determined......

      If you have large "management/licensing" charges levied in a separate tax jursidiction then the taxable profit can potentially be adjusted/minimised accordingly

      1. Voland's right hand Silver badge

        Re: How about fixing the existing tax code to cover this??

        I don't want to add a tax to large companies that are not or barely profitable

        You are missing the point.

        Several global companies of note are deliberately running at minimum or no profit for 10 odd years now to destroy any competition.

        One option is to go communist and make Suslov's scribes happy (tax on turnover was a stable in the economics textbooks on the other side of the wall).

        The other option is to apply what is currently part of the company code as applicable to financial industry in most European countries.

        1. Minimum capital.

        2. Minimum dividend and mandatory changes of board and regulatory intervention if the dividend is not paid.

        Just define 1 relative to turnover. The precedent is there - VAT and friends. You are simply not allowed to operate without full VAT registration if your turnover is past a certain size.

        Turn over of 100Bn with a capital of one pound? Excuse me, where did the rabbit go and is he drinking tea with the Hatter and the door-mouse again.

        The second option is significantly better for overall corporate governance compared to taking a leaf out of the Communist economy books (we know where that one ended).

        1. I ain't Spartacus Gold badge

          Re: How about fixing the existing tax code to cover this??

          Voland's right hand,

          I don't think we should do anything that was in a Communist economics textbook. In general turnover taxes are a really bad idea. Though the UK proposal is set low and only on profitable companies - so it's crecognising that and doing it for simplicity. They can always choose to register a presence here and pay proper corporation tax - if they think they're being overcharged.

          We can't set minimal capital and dividend for companies not listed on our stock market. Although I can't think of a financial regime does that anyway...

          VAT is not a turnover tax. It's a consumption tax.

          VAT has an almost identical effect to a sales tax, it's just much more cmplicated. The advantage of that complication is that the government gets better economic data and fraud is easier to detect. The downside is the extra costs and paperwork imposed on businesses.

          1. Zolko

            Re: How about fixing the existing tax code to cover this??

            "In general turnover taxes are a really bad idea"

            That's a little short on proof: why is it a bad idea ? It's easier to check, and makes high-volume/low-margin commerce - such as Amazon and HFT - less profitable. That's actually what economics Nobel price (1) winner James Tobin proposed. So you had better come with very good arguments why this is a bad thing.

            VAT has an almost identical effect to a sales tax

            yes, and that is, by definition, a tax on turnover: the consumer pays the tax on the quantity he buys. It's a buyers-side turnover tax. So that's a good idea then ?

            (1) yes, I know

            1. I ain't Spartacus Gold badge

              Re: How about fixing the existing tax code to cover this??

              Zolko,

              VAT and sales taxes are taxes on consumption - not on business turnover! This is really important to understand. It's basic tax incidence - because the tax falls on the consumer, not the business.

              The reason that it's not a turnover tax is that businesses don't pay VAT. Therefore if you're a company that sells to both consumers and businesses - only the consumers pay VAT - i.e. they end up paying more for the same goods than the business customers. It's not a turnover tax, because you ignore it in your accounts - I mean there's lots of shuffling around, but sales and costs are reported excluding VAT - all that stuff is diverted into your VAT account and then the net of that paid to the government every quarter - or month if you're big enough. So there's all this money changing hands, and the finance department have to worry about cashflow (as you pay invoices with VAT) but all the business people only talk net figures, and ignore it.

              I don't believe Tobin was calling for a tax on retail! The Tobin tax was designed to make short term share/bond ownership less profitable - and therefore relatively rewared long-term ownership. It was not designed to punish retailers for choosing to make smaller profits than their rivals.

              It's also not a turnover tax either. It's a tax on buying shares/bonds. I've not read his papers, but I'd assume it's there as a "sin tax" i.e. to discourage certain behaviour. As well as to raise revenue supposedly painlessly. The turnover of a finance company is the services they're selling to their customers - whereas a Tobin tax would be a tax on transactions - but nobody but market makers make all their money out of transactions, so it's an increase on costs. A turnover tax on financial companies would be a tax on their turnover - i.e. a percentage charge on their total sales.

              As happens HFT is a great idea, in theory. It makes markets more liquid, more transparent and lowers transaction costs and arbitrage. The reason it's probably not a good idea is the risk when that market liquidity is withdrawn - which is why traditional market makers are probably a much better idea. But wasn't Tobin's work from before HFT was a thing?

              Anyway when the Swedish tried a Tobin tax something like 70% of their stock market transactions disappeared overnight. Perhaps they set it too high? However London has had a stamp duty forever, and is the top or second financial market in the world, so it's not impossible. But when the EU looked at a Tobin tax a few years ago, the Commission's calculation was that it would raise something like €20-€30bn - which isn't chicken feed but isn't that much over such a large market. However it would reduce growth in those countries by 0.1-0.2% - every year. Which meant I think that it wouldn't even have a positive effect on governent revenues in the first year, basically other taxes would fall more due to the drop in growth. As well as basically costing a growing amount of money to the economy forever. Also if they made people more reluctant to buy government bonds, it would have made the Eurozone debt crisis even worse.

              Anyway I'd argue the most advocates of a Tobin tax are engaging in wishful thinking. The idea that you can raise taxes without pain is just silly. You can't make someone else pay them, as that someone else will then have less money to pay you, and so everyone suffers.

              But you've also not understood it. It's a financial transaction tax and not a turnover tax.

      2. Anonymous Coward
        Anonymous Coward

        Re: How about fixing the existing tax code to cover this??

        Unfortunately nothing will change whilst there are still clapped-out politicians planning for cushy retirement home 'jobs'.

      3. jmch Silver badge

        Re: How about fixing the existing tax code to cover this??

        "If you have large "management/licensing" charges levied in a separate tax jursidiction then the taxable profit can potentially be adjusted/minimised accordingly"

        I believe that in some jurisdictions there are already rules in place that do not allow a company to charge itself (for example a local or international parent/subsidiary) significantly more or less than market value for these services.

        For example if global coffee prices are $x/kg, Starbucks Switzerland aren't allowed to charge Starbucks UK $2x/kg. If Google US transferred it's IP to Google Bermuda for free or for a nominal sum, Google Bermuda cannot charge Google UK anything for use of that IP. Don't allow companies to invent out of thin air the values of intangibles such as image rights, goodwill, etc, but have them pegged to real balance sheet items. A lot of rules and mechanisms already exist for this in the tax codes, they just need to be enforced properly.

        Of course that would not solve the problems of for example, Amazon operating at near-zero margin to eliminate competition, but that can be addressed under antitrust law.

        1. Steve K Silver badge

          Re: How about fixing the existing tax code to cover this??

          ....pegged to real balance sheet items

          Intangible Assets (predominantly Goodwill - as in Brand presence etc.) are already real items (notwithstanding their intangibility!) capitalised on the Balance Sheet and subject to agreed valuation (and review) criteria under various Accounting Standards (e.g. IFRS) rather than invention out of thin air.

          Goodwill can be subject to impairment also which may require a write-down in its value in-year.

          It CAN therefore be used as a metric for the case you mention as it is measurably quantified.

          Note that I am NOT saying that this kind of profit transfer/tax shopping leading to minimal profits is defensible, merely it is within the law and other regulations (e.g. IFRS)

    2. streaky Silver badge
      Pirate

      Re: How about fixing the existing tax code to cover this??

      So how about fixing the existing tax laws to get rid of shady tax strategies such as the "Double Dutch Debit", the "Irish Shower", "Lax in Lux(embourg)" and "Nobody ever goes to Jersey, but somehow our multi-billion dollar company is headquartered there"??

      Because it operates under the rules of the Single Market. No single market, no problem. Problem is the rules that make this a thing won't change before hell freezes over.

      If nothing else, pass an EU wide corporate income tax for specific types of companies that are problematic, so that wherever you operate in the EU these companies pay the same tax.

      Won't solve the problem and would trigger many referendums that would certainly fail in a whole bunch of countries. You'd turn even Luxembourg into a country intent on leaving the EU. They don't want a fair tax system, and that's the problem and why this will never be a thing, a lot of countries are quite happy with how things are thank you very much.

      The key to this is being clear about what we're talking about and then doing it right and doing it fairly - I do see why Hammond has done this unilaterally (I always suspected this was going to be the case). If they're paying tax at a rate that smells sensible they shouldn't be fair game - if they're providing minimal value to a country and potentially even actively harming it, paying no tax and located somewhere they pay almost none like, I don't know, Facebook then the system is unfair and measures to correct should be applied. The UK tax system is exceptionally simple, and we need to stop being taken for a ride by companies making massive revenues and synthetically buried (by moving) profits for the avoidance (and evasion) of tax here. If they don't like it they have the choice to not serve customers in the UK.

      1. I ain't Spartacus Gold badge

        Re: How about fixing the existing tax code to cover this??

        I'm surprised the Chancellor brought in a measure to tax companies in 2020 that will be surely overtaken by Brexit. When we're not in the Single Market anymore, surely companies won't be able to book UK profits in Ireland/Luxemburg/Netherlands, as now? So I guess as the system is only "a consultation over details", it can always be changed to meet whatever relationship we end up having with the Single Market.

        1. streaky Silver badge

          Re: How about fixing the existing tax code to cover this??

          When we're not in the Single Market anymore, surely companies won't be able to book UK profits in Ireland/Luxemburg/Netherlands, as now?

          This is a simple one - because Hammond doesn't think we're going to leave the single market and that it's up to him. I very strongly hope and would suggest to the government as a voter and 40% tax payer (and FWIW as a party member under 40 - we're a rare breed) that this isn't a thing.

      2. Anonymous Coward
        Anonymous Coward

        Re: How about fixing the existing tax code to cover this??

        "Because it operates under the rules of the Single Market. No single market, no problem."

        That's somewhat oversimplifying. Taxes also mysteriously disappear in the Isle of Man or the Channel Islands, and sometimes between the US and the EU. Tax heavens were not invented by the EU.

        The single market helped avoidance in some cases, because specific countries were eager to find ways to abuse it (and some of those ways were not legal). There are loopholes to close, but let's not throw the baby out with the bath water, shall we?

  3. steelpillow Silver badge
    Boffin

    Life's not fair

    The only "fair" solution would be a profits tax, levied in the country where the income was generated. But if you have a UK resident clicking through a Chinese advert, paid for into a Bahamas offshore bank account, placed on an American company's website hosted in Finland, how do you decide where the income came from?

    1. Commswonk Silver badge

      Re: Life's not fair

      I think you answered your own question when you wrote you have a UK resident clicking through.

      1. #define INFINITY -1 Bronze badge

        Re: Life's not fair

        VPN anyone?

        1. Jamie Jones Silver badge
          Happy

          Re: Life's not fair

          ... then countries which monitor/restrict internet access more, will end up getting less tax revenue due to more vpn usage!

          1. bombastic bob Silver badge
            Stop

            the laws of unintended consequences

            per-packet taxes mean fewer packets

            per-transaction taxes mean fewer transactions

            Using a country's IP address blocks to levy taxes means increased VPN usage (as mentioned above) to avoid taxation.

            Do you _REALLY_ want "a tollbooth" on 'teh intarwebs' ? I don't.

            And what effect would DRIVING COMPANIES AWAY from your country [not being a 'tax haven' any more] have on INCOME TAXES from employees that WORK there? [this could be moot if an entity is simply a shell company working as a pure tax shelter, which would have few or no local employees].

            But yeah, if you drive them AWAY, your tax revenue will be ZERO. Understandably, nobody's gonna just BEND OVER and TAKE IT when gummints impose taxes and regulations.

            unintended consequences are OFTEN the direct result. And politicians NEVER "get it".

            1. jmch Silver badge

              Re: the laws of unintended consequences

              "Using a country's IP address blocks to levy taxes means increased VPN usage"

              Internet purchases are typically made by credit card which are registered to a country. Physical goods delivered need a shipping address. Using IP address to determine tax location is not only unnecessary, it's nonsensical.

              1. Anonymous Coward
                Anonymous Coward

                Re: the laws of unintended consequences

                "Internet purchases are typically made by credit card which are registered to a country."

                People, they travel, and carry payment devices with them. If you think that "just tax the credit card" is an easy answer, you're clearly underestimating how complicated those things are.

                "Physical goods delivered need a shipping address."

                We're talking digital services here. Governments are quite aware of how customs work, and don't really need your insight on that.

            2. streaky Silver badge

              Re: the laws of unintended consequences

              Using a country's IP address blocks to levy taxes means increased VPN usage (as mentioned above) to avoid taxation.

              Are you really saying that because of edge cases we shouldn't do anything about this? People aren't going to use VPNs to use facebook purely for the intent of pretending they're in Ireland just to save Facebook £0.0000000000001 a year, that's *insane* to even suggest.

              If it's a sale of an actual thing leaving the EU fixes this problem because customs, if it's a company intent on making no margin because services they either play ball or get lost - this by the way is perfectly doable by Facebook saying what percentage of their user base are in the UK and figuring out what is what from there - there's actually no need to not trust their numbers on this; even as it relates to tax, until proven otherwise. Also by the way being banned from booking UK ad sales to the RoI when we leave the EU.

        2. LDS Silver badge

          "VPN anyone?"

          Useless, unless you allow anonymous purchases in bitcoins - otherwise an invoice must be issued to someone, and the payment as well must come from someone.

      2. Anonymous Coward
        Anonymous Coward

        Re: Life's not fair

        "I think you answered your own question when you wrote you have a UK resident clicking through."

        Not at all obvious. Wasn't it generated rather where the actual service was realized? And where was that? Was it on the screen/speakers of one user, that might be a different one? Or was it in a datacenter? Or was it where the contract was generated (as those T&Cs very often stipulate, you might recall)?

        Go talk to a lawyer, you'll find that there's not a clear-cut answer to that question as you believe. Furthermore, the proper legal answer will actually vary depending on the jurisdiction.

        1. Zolko

          Re: Life's not fair

          "Go talk to a lawyer, you'll find that there's not a clear-cut answer"

          well ... he would say that, wouldn't he ? His salary depends on you needing him, so he'd have a tendency to make things look more complicated than necessary.

  4. LDS Silver badge

    "The tax would benefit countries with large populations"

    Which are, incidentally, the same which are damaged more by web giants funneling more money out of them - while a larger population has evidently more social costs that have to be covered by taxes, and if someone doesn't pay, others will be called to fill in. And sincerely, my taxes are high enough already, I prefer Amazon & C. pay their share, even if it means some of my purchases could cost a little more.

    Those three countries together are little more than 1/4 of my country population...

    1. Phil O'Sophical Silver badge

      Re: "The tax would benefit countries with large populations"

      Those three countries together are little more than 1/4 of my country population...

      Which is why it's curious that the article only refers to Ireland, Sweden and Denmark, while ignoring the 4th country which is opposed to this tax on revenue that was proposed by France - Germany. Hardly a small player.

      It was discussed on French radio yesterday. The commentator made the point that while Macron is pushing this as a good initiative for the EU, Germany's reluctance is embarassingly blocking it. He added that Brexit will allow the UK to introduce such a tax alone as Hammond has suggested, which is not good for Macron's image.

      1. LDS Silver badge

        Re: "The tax would benefit countries with large populations"

        Germany has a surplus that makes it less dependent on other revenue streams, and also has a large export surplus that could be threatened if US companies get the US government to retaliate with tariffs on its products and companies. Usual selfish German approach - they can't ask other countries to resolve their debt and slow growth problems while allowing money to fly away, requiring harsher conditions locally. Sure, this won't resolve it and other measures are needed, but this is still part of the problem.

        I would also lie to see where local business are impacted more - Germans usually have an higher purchase power than elsewhere (higher wages and lower prices). Countries with high tax rates and higher debt (France, Italy), are obviously much more interested in getting the money which are escaping now.

        And still both SPD and CDU are taking big hits at every election...

        I wonder if Sweden if part of the group because it fears Ikea will be impacted by the rules.

        1. I ain't Spartacus Gold badge

          Re: "The tax would benefit countries with large populations"

          Germany was in favour of the deal. Merkel agreed it with Macron a few years ago. It was one of the few of his suggestions for EU reform that she actually agreed to. I presume they're blocking because of worries about Trump getting difficult.

          But Merkel's not always so hot at sticking to her agreements. Though I'm not really up on the politics of why Germany isn't in favour. Is it coalition politics?

          1. Phil O'Sophical Silver badge

            Re: "The tax would benefit countries with large populations"

            Though I'm not really up on the politics of why Germany isn't in favour. Is it coalition politics?

            Germany wants a worldwide agreement, WTO-level, and isn't in favour of the EU going it alone, as France wants.

            1. I ain't Spartacus Gold badge

              Re: "The tax would benefit countries with large populations"

              Phil O'Sophical,

              So why did Merkel agree on doing it at the EU level with Macron last year? It's that change I don't understand.

              1. Phil O'Sophical Silver badge

                Re: "The tax would benefit countries with large populations"

                So why did Merkel agree on doing it at the EU level with Macron last year? It's that change I don't understand.

                Donald Trump happened, I think. Germany is worried about reprisals against its industries if this becomes an EU/US trade war. That seems to be the French interpretation, anyway. I don't read German so I can't check their press, perhaps someone else will have info.

                1. I ain't Spartacus Gold badge

                  Re: "The tax would benefit countries with large populations"

                  Thanks. I guessed it would be, but haven't seen anyone explain it. German politics are a bit fluid at the moment, what with the coalition losing popularity and Merkel announcing she's off - which makes things much harder to follow from a distance.

  5. aks Bronze badge

    Revenue (a.k.a. turnover) is already taxed. It's called VAT.

    None of this grandstanding considers the obvious counter-strategies the digital companies will adopt.

    All companies with shareholders are duty-bound to minimise their costs. One of the ways to do this is to use the existing laws in legal ways.

    Until the OECD including Brussels and Washington can agree on a new taxation strategy there will be no real change.

    1. Steve K Silver badge

      VAT

      It is effectively transparent to company turnover - stat accounts are all ex-VAT (although you will see a net debtor/creditor for VAT owing). VAT is accounted for on the net of (VAT-able) inputs and outputs so its not a tax on turnover.

      It is ultimately paid by the end consumer in the chain for that item.

      1. #define INFINITY -1 Bronze badge

        Re: VAT

        Technicalities aside (looking at the downvoters of OP), 'None of this grandstanding considers the obvious counter-strategies the digital companies will adopt.'. Any arguments?

      2. veti Silver badge

        Re: VAT

        Of course the tax is ultimately paid by the end consumer of the item. And who the heck else do you imagine is going to end up paying this tech tax, if the EU is dumb enough to pass it?

        OP is spot on: VAT, aka sales tax, is the only fair way to tax big companies. A tax on "profits" inevitably ends up with a lot of very fat accountants, and angry headlines in the tabloids about how some billion-dollar business is paying $4.93 in tax.

        1. Ledswinger Silver badge

          Re: VAT

          sales tax, is the only fair way to tax big companies

          SOME big companies.

          I work for a company with a multi billion turnover in a commodity sector with thin margins. We already pay all of our taxes according to law, we have no offshore Dutch-double-Irish-NewJersey-Caymans quad decker sandwich tax arrangements.

          As a matter of common sense, corporate taxes should be on profit (if anything, but that's another argument), and the problem here is that a small number of largely American companies are exploiting technicalities to transfer profits. Punish those fuckers, not those who already pay their fair share.

          1. anothercynic Silver badge

            Re: VAT

            the problem here is that a small number of largely American companies are exploiting technicalities to transfer profits. Punish those fuckers, not those who already pay their fair share.

            Please. Who are you kidding? *Every* company employs a number of accountants who, whenever something in the tax law changes, look at how it can improve the company profit margin and minimise tax exposure. It's *not* just 'largely American' companies who do this. Every company does it.

            And if the law permits it, it is not 'exploiting a technicality'. It is called 'doing what the law says you must do'. That HMRC (or whichever tax authority) eventually cottons on and goes 'hang on, that's not what we meant', that's not the companies that are at fault, but shoddy law-making.

            The Double Irish Dutch Sandwich mechanism only exists because the Dutch tax authorities let it. Why do they let it? Because a little bit (the Dutch 'foundations' that usually make up part of the DIDS are still taxed in the Netherlands but at a virtually nil rate because their 'revenue' is all royalty) of a large pie (the said DIDSes) is still better than *no* slice, or worse, *no* pie at all. The Dutch government knows full well that this mechanism is being subverted to funnel profits away, but that arrangement suits them, until it doesn't, that is.

            Ireland has already done its bit and has eliminated the quirk in their law books that allowed the Double Irish (portion of the DIDS) to exist. By 2020, all companies using the Double Irish have to have eliminated them because then it is no longer a legal mechanism that has any tax advantages.

            1. Ledswinger Silver badge

              Re: VAT

              anothercynic: Please. Who are you kidding? *Every* company employs a number of accountants who, whenever something in the tax law changes, look at how it can improve the company profit margin and minimise tax exposure. It's *not* just 'largely American' companies who do this. Every company does it.

              You miss the point. every company should try to minimise its tax costs within the law. However, a small number of most US companies take this to a ridiculous extreme, exploiting the intangibility of their services to dishonestly claim that they make little or no profit in EU markets. I work for an energy supplier. We could, in theory, set everything up so that the contracts flow through offshore companies to dodge virtually all UK corporation tax, but we don't; we do however look to ensure that we claim all legitimate offsets, and to undertake our business in a manner that is mindful of the tax impacts.

              However, I'd agree that shoddy law making is to blame. And more importantly, failure by politicians to react quickly - the world changes, you can't expect laws written years ago to always be fit for purpose. Yet this has been going on for years, and the Morons of Westminster have sat on their dumb fat arses and done little or nothing. At least Hammond has finally made a tiny belated and deferred start.

          2. Zolko

            Re: VAT

            Ledswinger : "and the problem here is that a small number of largely American companies ..."

            ... and a small number of purely European non-countries (Andorra, Luxembourg, Lichtenstein, Monaco, Jersey ...). It's too easy to accuse only the US on this when the tax-evader-in-chief (Luxemburg's ex-primeminister, revealed in LuxLeaks) is the head of Europe. It's like the fox guarding the hen-house.

        2. bombastic bob Silver badge
          Devil

          Re: VAT

          "angry headlines in the tabloids about how some billion-dollar business is paying $4.93 in tax."

          that's correct. they do that. And they do that LEGALLY by exploiting all of the loopholes, etc..

          YOU would, too, if you could. Right? I know of NO altruistic people who would just bend over and pay out all of that money to a gummint when there's a legal way to get around doing it.

          1. Diogenes

            Re: VAT

            Exactly !

            It like that hypocrite Warren Buffett - "its so unfair my secretary pays proportionally more tax than I do", yet he has a means of addressing that unfairness by writing a very large cheque to US Treasury's voluntary tax fund "to reduce the national debt"

          2. Potemkine! Silver badge

            Re: VAT

            YOU would, too, if you could. Right?

            No, because I value morality above profit. Avoiding to pay tax is refusing to take one's share of education, defense, infrastructures and so on. Selfishness and greed destroy societies.

            A point of view not shared by the corrupt ones who govern us, if they weren't so corrupt they would have closed all these loopholes a long time ago.

            1. Phil O'Sophical Silver badge

              Re: VAT

              No, because I value morality above profit.

              So you voluntarily hand over more tax than you are legally required to, every year? That's nice of you, but perhaps you'd consider giving to some charities instead, they'll likely use it more wisely.

              Avoiding paying tax that you don't legally have to is entirely reasonable. Evading tax that you're legally required to pay is of course both morally reprehensible and criminal. Not the same thing.

          3. LDS Silver badge

            "And they do that LEGALLY"

            I don't know how much legal it is, when you pay politicians to build such loopholes into tax codes... loopholes which strangely benefit a few powerful ones, and rarely, if ever, the common people...

            1. Phil O'Sophical Silver badge

              Re: "And they do that LEGALLY"

              rarely, if ever, the common people...

              Are you sure? My tax bill each year shows a reasonable number of allowances for things like pension contributions, energy savings, charitable donations, etc.

              1. LDS Silver badge

                "a reasonable number of allowances"

                Those are not "loopholes" that allows to slash your taxes to a few percent o even lower. Yes, I can too deduct a huge 19% of my health expenses, but only after having subtracted 129 euros.... the year I had high expenses because of a serious illness I also got a revenues agency control because of that...

                We are not talking to the usual simple cost deductions here - which aren't "loopholes".

                If you look at many tax codes, you will find loopholes that usually require a complex structure to be put on to achieve huge savings, structures that are beyond the capabilities of most people. Often those loopholes are introduces in a covert way, maybe through amendments to other laws, by "unknown" hands, so nobody gets the responsibility.

          4. jmch Silver badge

            Re: VAT

            "And they do that LEGALLY by exploiting all of the loopholes,"

            They do that by legally exploiting the loopholes that they have created for themselves by spending billions on lobbying and lawyers. The best governements that money can buy to give them the best tax laws that money can buy.

        3. FF22

          Re: VAT

          "VAT, aka sales tax, is the only fair way to tax big companies. "

          VAT and sales tax are completely different things. The whole point of VAT is that it's only paid at the consumer at the end of the supply chain, and thus can not be used to "tax big companies".

          1. veti Silver badge

            Re: VAT

            VAT is collected from the party that sells the thing. That's a sales tax. Yes, there's some extra accounting that goes into it, designed to make it fairer and avoid accumulating, but the end result is that 20% or whatever it is of the total turnover goes to the treasury.

            1. I ain't Spartacus Gold badge

              Re: VAT

              veti,

              VAT and sales tax are almost identical in effect. They're a tax paid by (mostly) non-business consumers. Very small business like painters and decorators are small enough to have to pay them.

              Sales tax and VAT are not charged on business-to-business transactions.

              The difference is that VAT is paid as part of b-to-b transactions, it's just then claimed back from the government afterwards. The extra complication means that it's harder to commit fraud. Whereas with a sales tax you can arbitrarily declare a transaction b-to-b and avoid it.

              So VAT causes more paperwork, but should be harder to avoid. And as a side-benefit all companies are giving the government quarterly/monthly info on their costs and sales - which is good for the statistics.

              VAT is not a tax on turnover. Because no large company actually pays it.

              Also, by the nature of VAT, any profitable company will have higher sales than costs. Therefore they'll almost always have extra cash in the bank from getting paid including VAT to offset the fact that they pay VAT on their costs before they can claim it back. So effectively you're paying to do the paperwork to have a slightly higher cashflow than you otherwise would.

              Corporation tax is only on profits. As it should be.

              This is because different types of companies make different margins. A software company generally has high margins, whereas a manufacturer of commodity goods will have very low ones.

              If you taxed on turnover and not profits, all the spoon manufacturers would go out of business, while all the software manufacturers would end up paying less than if you taxed them on profits.

        4. LDS Silver badge

          VAT, aka sales tax, is the only fair way to tax big companies

          You mean taxing the customer - because it's the customer who pays VAT or sales taxes, not the company - is the only way? Companies can't increase prices easily to offset taxes on profits or revenues fully, because it could greatly impact sales. Maybe Apple can, but many others can't.

          Nor it looks not paying taxes is making some good cheaper for the customer.

    2. ratfox Silver badge

      As far as I understand, services such as those sold by Google and Facebook (though not Amazon) are zero-rated. If some French company pays Facebook Ireland for an ad, Facebook does not charge for VAT at all, and the French company pays the French VAT rate to France.

  6. Doctor Syntax Silver badge

    The tax would benefit countries with large populations national economies at the expense of those with innovative small natiional economies but large imported multi-national digital businesses

    FTFH

  7. bigtimehustler

    If they have no offices in Europe how exactly are they going to enforce this? A company could just not pay it.

    1. DavCrav Silver badge

      "If they have no offices in Europe how exactly are they going to enforce this? A company could just not pay it."

      They do have offices in the EU. A quick EAW will see the head of Google Europe in the local nick to explain the situation.

      If a company has no offices at all anywhere in the EU, it might have trouble selling large amounts of goods and services into the EU. Also, if the company is declared a criminal enterprise, most other companies won't engage with it.

  8. eldakka Silver badge

    Ireland's finance minister, Paschal Donohoe, echoed these points, adding that setting a precedent where the tax incidence is created and levied at the point where consumption occurs will have many consequences.

    What, you mean a consumption tax, like VAT or GST?

    1. LDS Silver badge

      I think Ireland should be reminded that an hard border could be a no issue for most of EU members, as it would impact only a few counties there, and there are already hard borders in EU along areas with common ethnic/cultural environments - think about the Polish and Rumanian border to the East. While UK is evidently using it as a lever to obtain a better deal in Brexit negotiations. So why EU should care about a wholly Irish problem, when Ireland shows again and again it doesn't care about others problems?

      1. Anonymous Coward
        Anonymous Coward

        This is maybe why they never asked you to help negotiate the Good Friday agreement.

        1. LDS Silver badge

          But Ireland is OK that the whole EU weight is behind keeping a soft border, isn't it? And EU is not asking Ireland to align its corporate tax rate to higher one - is just trying to ensure fair competition inside other countries, and avoid tax free money escape - which otherwise means higher taxes on citizens and local businesses - and Ireland also gets funds from EU citizens taxes, especially VAT.

          If Ireland is another country that believes it can only take advantages from being en EU member, and none of the disadvantages have the cake and eat it, well, it can return to blow its people along religious and political sectarianism, for what matters me. So we can also close the Irish border too because the fear of terrorists, and lets see how companies will be happy to stay in a place where a bomb can explode any time...

          1. Anonymous Coward
            Anonymous Coward

            Probably best to put the keyboard down for a little while and take some time to study Irish history.

          2. Slx

            I'd remind you that Northern Ireland is in the UK - and that is where there was political and sectarian conflict, not in the Republic of Ireland. All Ireland's trying to do is avoid a hard border to ensure that the Northern Ireland (again: I stress part of the UK) troubles do not become a live issue again. The status quo of having almost dual identity in Northern Ireland and the border not mattering at all since 1993 played an enormous role in calming that region (of the UK) down.

            The Northern Irish conflict occurred in the UK, it is part of the UK and there are no sectarian or terrorist issues in the Republic other than when there was some brief overspill which occurred 44 years ago in 1974 with the Dublin and Monaghan Bombings carried out by the UVF

            There are far, far fewer issues with terrorism in the Republic of Ireland than there are in much of continental Europe.

            I'd also point out the UK Government is currently propped up by a party that has very close links to all of that conflicted period.

      2. I ain't Spartacus Gold badge

        While UK is evidently using it as a lever to obtain a better deal in Brexit negotiations.

        LDS,

        That's a rather bizarre interpretation of what's happening.

        A frictionless Irish border is a problem in the negotiations because the UK government doesn't want to stay in the Single Market - basically because the political consensus is that most voters oppose freedom of movement.

        So far the EU position is that if the UK doesn't stay in the Single Market then the UK must break it's own Single Market and put Northern Ireland behind some sort of internal customs and legislative barrier. It should be obvious to anybody even vaguely reasonable that this is an unacceptable demand to make.

        Whatever you think of Theresa May's attempts to get round this, she's not trying to use it as a lever to gain advantage in the negotiations. Becaue the fall-back position would be to do a Canada-style free trade agreement and have an amicable Brexit, but the current Commission position is that short of the UK accepting the unacceptable this can't be done.

        Whether you argue the Commission are being reasonable in protecting Ireland or dishonest in using this to try to force the UK to stay in the Single Market with no other options is a matter for your own judgement.

  9. Anonymous Coward
    Anonymous Coward

    Paying tax?

    How 20th century!

    1. Tom 7 Silver badge

      Re: Paying tax?

      I reckon it could be 10 or 20 years before the infrastructures of the world collapse to the point where people start realising what a good idea tax is, and then they can charge us for the privilege of re-inventing it.

  10. Tom 7 Silver badge

    It would be nice if we could have a global agreement

    so we can play whack-a-mole with any governments that look like they might be thinking this is a good idea.

    1. Anonymous Coward
      Anonymous Coward

      Re: It would be nice if we could have a global agreement

      It would be nice if we could have a global agreement

      And you think the current beneficiaries going to agree to that? Don't forget that the current beneficiaries are not just a long list of tax havens, but the largest and most powerful corporations in the world, who have considerable influence over the US government.

      so we can play whack-a-mole with any governments that look like they might be thinking this is a good idea.

      Even then, look at how the EU treats countries that don't stick to the agreed fiscal rules - if they're France or Germany, then the rules get "interpreted" around. If its some Southern European country with no clout, then all hell is unleashed. Indeed, when the tax avoidance is through Jean Claude Junker's tax haven homeland, its all legal and above board. When Ireland does it, that's illegal.

  11. AdrianMontagu

    If you generate the sales here, you pax the tax here - simples!

    1. I ain't Spartacus Gold badge

      Slight change. If you generate the profits here.

      You've got to take account of cost of sales in taxation. Or you destroy all the low-margin companies that do stuff we want to happen.

      The UK are doing this as a turnover tax, but only on profitable companies and only a low rate. And I imagine they'll always have the option to set up an HQ here, and then pay corporation tax on their profits, if they think that's going to cost them less than a 2% sales tax.

  12. Nonymous Crowd Nerd

    I don't agree that they should

    "hold off on implementation until 2020, to push the OECD to agree an international version by then."

    It's fairly clear that we have things that we need to pay for now. I see no reason to delay this implementation, then later, IF the OECD come up with something viable we could roll back on version and implement theirs.

    Fetching in this tax now could, for instance, fill the hole that will be created by the reduced stake rule on Fixed Odds Betting Terminals. In this way the FOBT stake limit can be implemented at the proper time and lives can be saved.

    1. I ain't Spartacus Gold badge

      They haven't designed the tax yet. And as we're probably leaving the Single Market, due to Brexit, that changes how companies can shop around for the lowest corporation tax regime in the Single Market. Unless of course the Brexit doesn't mean leaving the Single Market. So doing it now would probably be silly, even if they had got the rules already written.

  13. J P
    Boffin

    Tax nerdery

    It's been very neatly summarised by Dan Neidle, a tax partner at Clifford Chance:

    "1. Taxes with high thresholds are a bad idea - they distort behaviour at the point of the threshold.

    2. Sector/activity taxes are a bad idea - they draw an arbitrary line at which the tax applies, and invite uncertainty, disputes and avoidance around that line.

    3. Turnover taxes are a bad idea - they over-tax new entrants and under-tax well-established players (and so under-tax economic rent)

    The particular genius of the EU and UK digital services taxes is that they are sector-based turnover taxes with a high threshold."

    Dan also makes the very pertinent point that most of these taxes are only going to work if you're able to track users to a fair degree of granularity, otherwise you can't deal with issues like multiple devices, travelling cross-borders etc. However, there have been some recent rules about that sort of thing, suggesting that either governments have done the assessment and decided their taxes are more important than your privacy, or they haven't thought about it yet.

    1. LDS Silver badge

      Re: Tax nerdery

      The problem is they are very efficient at hiding profits, so turnover becomes the only available metric to base a tax upon. Sure, closing many of the holes that allows for profits be artificially lowered to ridiculous amounts would help - but it often would exactly need international agreements because of issues like double taxation. etc. It's pretty clear old models made when transnationals sales were far lower, and moving money far harder, can't work any longer, so new models are needed.

      Anyway, don't forget where big law firms get their money from... they obviously lobby for their clients.

    2. I ain't Spartacus Gold badge

      Re: Tax nerdery

      J P,

      Those are all fair points. But if one particular sector is particularly guilty of tax avoidance on a massive scale, then you might ignore those otherwise sensible rules in this case.

      This UK tax doesn't affect new entrants as you need to be both profitable and have a high turnover to fall under it.

      This system may not be ideal, but neither is allowing Google, Facebook et al. to totally avoid paying tax.

      1. J P

        Re: Tax nerdery

        The problem is we simply don't have a mechanism for taxing "what Facebook do in the UK". It sounds like nitpicking to say that what they're doing isn't avoiding tax, but unfortunately it's pretty fundamental that if the activities they're involved in don't fit the existing models then you can't really say they're "guilty of tax avoidance on a massive scale" unless your definitions of guilt and tax avoidance also sit outside currently accepted definitions.

        It is reasonable to say that businesses should contribute back into the societies that support them and for all sorts of reasons tax is the best way to do that under current arrangements. But, taxes are generally national affairs, and allocated on the bases of time, geography and legal personality. Time isn't an issue here, but the geographic and legal things are a problem. It's not enough to be upset about what they're doing, you need a bullet-proof legal mechanism to do something about it - and as you'll know if you've been following this stuff in the press, the US is not entirely thrilled by developments (quite apart from the issues round slotting these things into the existing international frameworks).

        1. I ain't Spartacus Gold badge

          Re: Tax nerdery

          J P,

          I did say "guilty of tax avoidance". Which I admit is an oxymoron - seeing as tax avoidance is legal and it's tax evasion that's a crime.

          The US isn't thrilled by this, but then a lot of that is grandstanding for the press rather than legitimate complaint. It's not like they're getting this tax either. Although I haven't read up on the effect that changes to US corporation tax are going to cause yet.

          The UK introduced a new law a few years ago that allowed us to class some forms of technically legal tax avoidance as tax evasion. Not that you'd be retrospectively prosecuted - but you'd not be able to continue with the scheme. In cases where a vehicle has no purpose other than to avoid tax (some of those film investment vehicles for example).

          The European Single Market complicates this of course. But it's relatively easy to work out what Facebook would owe in the UK. Take an appropriate share of their global costs, and knock that off their UK advertising take. Admittedly there's global branding from multi-nationals, but a lot of them split much of their advertising spend nationally - for the ones that don't we'd lose out on the revenue. It's not about getting everything.

          Google's UK advertising sales were £6 billion the last time they had a sales department in the UK. I'd argue they were committing tax fraud that year, because the sales team were in the UK, but the contracts were all sent from Ireland, so they could be signed and all revenue booked there. HMRC agreed I think because Google moved the sales team to Ireland the next year.

          The answer may be to remove all corporation taxes and tax dividends instead. But then that doesn't work for the companies who don't pay dividends - so global action is clearly preferable. This is where action was needed in the US with their 35% corporation tax plus similar tax on dividends - incentivising US companies not to pay them. So in the abscence of a perfect solution, and with international agreement hideously complicated a small turnover tax on highly profitable companies with current global effective corp tax rates of 2-3% - I don't see action as unreasonable. And they can always incorporate here to get round it.

  14. codejunky Silver badge

    Hmm

    "some member states refuse free money"

    Good. It is always promising to hear that not everyone is stupid enough to think there is free money and consider the fact that there are consequences to actions. How do people find tax loopholes? By studying the over complicated taxing system which seems to be added to by politicians trying to buy votes. I am sick of hearing the wet dream fantasies that a new tax on the 'rich' will suddenly bring in vast amounts, and then of course it doesnt. It does add a new complication to the tax system and eventually gets applied to everyone else in the constant grab for more 'free money'.

    Good on those member states for not letting dreams of free money cloud their better judgement.

    1. Anonymous Coward
      Anonymous Coward

      "wet dream fantasies that a new tax on the 'rich' "

      So like in the MIddle Ages only the peasants should pay taxes? Remember one of the causes of the French Revolutions was the "nobles" (and clergy) refused to pay most taxes - making reforms impossible in a cash-strapped state. It's no surprise a new waves of "Jacobins" is sweeping Europe.

      While in the US the Revolution was against taxes - just because they were a colony where influential people didn't live - in most Europe revolutions were against the privileges of the local "nobles" class.

      After all, it was the same - some people were heavily taxed while others were exempt, just the perspective was different because of geography, in US it was the "foreign" UK government and its people, in most Europe was the local government.

      It's on the interest of rich people themselves to ensure heads don't start rolling again.... and increasing inequality is not the best way to achieve it.

      1. I ain't Spartacus Gold badge

        Re: "wet dream fantasies that a new tax on the 'rich' "

        Your point is valid about tax being a major cause of the French Revolution. But not in the case of the US. Their taxes were lower than the UK. Even after they'd been raised to help offset the costs of recent military operations to protect them.

        Although I guess the point still stands. If enough people percieve something to be true, it might not matter so much whether it is or not.

        1. Anonymous Coward
          Anonymous Coward

          "But not in the case of the US"

          So the Stamp Act, the Tea Act didn't play any role in leading to the US Revolution? It didn't matter what the tax level was, what what mattered was they felt the UK government treated them in an unfair way, at whole advantage of UK against the colonies.

          1. I ain't Spartacus Gold badge

            Re: "But not in the case of the US"

            So the Stamp Act, the Tea Act didn't play any role in leading to the US Revolution? It didn't matter what the tax level was, what what mattered was they felt the UK government treated them in an unfair way, at whole advantage of UK against the colonies.

            As I recall, the tea act was actually a reduction in tarrifs. And some of the people behind the Boston Tea Party were actually smugglers who were happy with high tarrifs, as it meant they could make bigger profits smuggling it.

            Stamp duty was incredibly unpopular. The Navigation acts were a pretty stupid idea as well - forcing trade to Britain to only be allowed in British registered ships.

            The government handled things terribly - but I think remote rule with poor communications and so poor information was more of a problem than taxes.

      2. codejunky Silver badge

        Re: "wet dream fantasies that a new tax on the 'rich' "

        @AC

        "and increasing inequality is not the best way to achieve it."

        Really? There are some wonderfully equal countries in this world, mostly burnt out shit holes you wont want to live in because they are so poor and the standard of living is something not even available in this country. Venezuela has made massive strides in reducing inequality, which is why they are leaving for places which actually have a standard of living.

        There have been wonderful efforts to rob the rich to give to the poor and make everyone equally poor. Oddly the Nordics realised after flirting with the same stupidity that the money cannot come from just the rich but by charging everyone high tax rates. I am not a fan myself but at least they recognised stealing from the few caused the few to protect themselves. Just as businesses and people are doing from the ever hungry tax man.

        We cry we want jobs and affordable products/services, and then seek to punish those who deliver. But they are the few and to defend them is not 'socially acceptable' by those benefiting from those services.

        1. Anonymous Coward
          Anonymous Coward

          "There are some wonderfully equal countries in this world"

          Not at all. Usually they are where inequality is at the highest levels, a few a the top with all the country resources at their disposals, and lots of descamisados with little or nothing, living of subsidies when available.

          Sure, you can "reduce" inequality like Venezuela or Peron Argentina giving some money away, and when money runs out, everything crumbles - still those at the top in Venezuela or Argentina didn't suffer what most people suffered or suffer now. Still, Venezuela never reduced inequality, when you're a serf depending on someone else money. And Maduro & friends are still rich people, probably with a lot of cash hidden abroad.

          Africa, and some Asia countries are no different.

          Or you can reduce inequality like a lot of European northern countries did, and have a working system.

          Stop thinking between Communism and unrestrained Capitalism there's no middle ground - or we'll end just bounding from one to the other - and suffer the worst of both.

          1. codejunky Silver badge

            Re: "There are some wonderfully equal countries in this world"

            An interesting problem of being successful and politicians wanting to spend more-

            https://www.continentaltelegraph.com/business/amazon-indias-losses-mount-showing-why-it-pays-so-little-tax/

            @AC

            "Usually they are where inequality is at the highest levels, a few a the top with all the country resources at their disposals"

            Sorry but that is where the countries are most equal. Yes you are right the majority are poor and the very few and favoured take all the cream but they are much more equal. They also dont have much of what we consider civilisation either when it comes to our bare minimum expectations. Which is the point I am making.

            We can either have unequal as success pays off and we all gain benefit from that, or we can all be equally brought down to the same level of squalor. Interestingly recessions make the people in our rich countries more equal. Shall we have more of those and more serious?

            "Or you can reduce inequality like a lot of European northern countries did, and have a working system."

            Yikes at the working system but ok lets accept that assumption for now. So you want the poor to be taxed 60% instead of fleecing the rich? You want to privatise health and education and massively reduce government to a local level taking away that central control? Far more free market but with crushing tax's on everyone (not the rich... everyone).

            "Stop thinking between Communism and unrestrained Capitalism there's no middle ground"

            Communism is a great example but basically socialism at government level is the killer. Capitalism works but requires free market to work (socialism requires free market to work in theory but govs struggle with that combination). The nordics tried socialism, realised they cannot afford it and went massively free market to balance their huge social spending and high taxation. And saying it works does require certain assumptions.

  15. Slx

    My question is will we also be taxing Renault, Peugeot-Citroen, Siemens, Lufthansa, Air France, the banks and so on based on their revenues rather than their profits in each EU state too, or just tech firms?

    There is genuinely an argument to be made that they do not make profits in the countries they do not operate in. They simply make sales.

    I'd rather see the tax loopholes closed, but it's a bit rich saying that you can have a single market, but not when a company wants to base itself in one part of that market and sell across the whole region. You can't on the one hand want a single market and then when it doesn't suit you just try to undermine that concept. It's as cakeist as Brexit.

    You're going to end up with some countries, much like some US states, being gateways to the whole EU market and each country already collects rather substantial VAT on sales in their countries.

    The stacking tax systems back-to-back to line up the loopholes has to stop, but I don't realistically think that you're going to see a rush of companies trying to relocate to France just because of a tax shift. There are huge problems in the French market with lack of flexibility (which can be overcome in the context of a modern a social democracy type situation as is clearly seen in Scandinavia), and there are huge issues with strikes and disruption and so on.

    Realistically the tax avoidance schemes need to be tackled at global / WTO level. In a lot of cases, it would genuinely be a case of the EU tying its own hands behind its back and trying to compete in the global market if it goes too far on this stuff.

    I don't agree with the massive tax avoidance, but I just think this is the wrong way to go about tackling it.

    I could genuinely see the US jumping on this is a grossly protectionist move too, which it could be interpreted as with counter moves on EU companies in the states.

  16. EUbrainwashing

    That which is out of date is 'the state'.

    The world of commerce is moving on and yet the dated idea of government is still trying to apply old taxation gathering paradigms to the today's borderless/distributed/digital free-market.

    What needs to be updated is the belief in the legitimacy and the utility of 'the state'. Belief in the morality of coercive taxation is out of date and so is the entire cult belief in 'the state'.

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