Reply to post: Re: Surely you tax adverts...

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

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.

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