U.S. to investigate planned French tax on Apple, other tech giants [u]

Posted:
in General Discussion edited July 10
President Donald Trump is planning to launch a probe into France's intent to implement a digital tax initiative targeting large internet companies, an investigation that could lead to tariffs or trade restrictions.

France Apple Store


Citing sources familiar with the matter, Reuters reports the president will task U.S. Trade Representative Robert Lighthizer with completing an investigation of the so-called GAFA -- Google, Apple, Facebook and Amazon -- tax, which would apply a 3% levy on French revenue generated by tech firms.

The tax applies to companies with revenues over 750 million euros (about $845 million) per annum, a relatively high bar that would target about 30 firms, most of them American. As noted by the report, companies from China, Germany, Spain and the UK are also affected by the proposed tax. One French firm and a handful of companies with roots in France would also be subject to the 3% tax, the report said.

Trump's supposed probe, called a "Section 301" investigation, will seek to determine whether the tax amounts to an unfair trade practice under the U.S. Trade Act of 1974. The White House previously used Section 301 to level tariffs on China over alleged patent theft, a move that sparked a trade war impacting a wide range of U.S. industries.

France officially announced plans for the GAFA tax in December to hold multinational tech companies responsible for paying their "fair share" of taxes. Large firms sometimes take advantage of favorable European laws to shuttle international profits to low tax rate countries, thereby avoiding hefty levies.

French finance minister Bruno Le Maire last year said the tax plan is expected to bring in 500 million euros ($563 million) over 2019.

France's National Assembly greenlit GAFA last week. The measure is now headed to the country's Senate, which will vote on its passage on Thursday.

Update: The investigation was formally announced on Wednesday night.

"The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies," Lighthizer said in a statement.
«134

Comments

  • Reply 1 of 72
    SpamSandwichSpamSandwich Posts: 31,309member
    Go get ‘em, Mr. President.
    apple ][zozmangeorgie01mobirdjedwards8780s_Apple_Guycat52macseekerseanjanantksundaram
  • Reply 2 of 72
    apple ][apple ][ Posts: 8,687member
    Punch 'em back real hard! :#

    Two can play at this game!

    Broke, desperate and corrupt Euroheads should look elsewhere for their extortion schemes, because we still got some cards left in our deck that we haven't yet played.
    edited July 10 80s_Apple_GuyAppleExposedlkruppcat52macseekeranantksundaram
  • Reply 3 of 72
    anantksundaramanantksundaram Posts: 19,295member
    Excellent. Let's see a tax on every Danone yogurt, Airbus plane, Schneider circuit breaker, bottle of champagne, Dior perfume, L'Oreal cosmetic, Air France ticket, and Michelin tire sold in the US.

    They'll come around pretty quickly.
    AppleExposedcat52williamlondonSpamSandwich
  • Reply 4 of 72
    zozmanzozman Posts: 393member
    Good!
  • Reply 5 of 72
    rob53rob53 Posts: 2,074member
    Problem is, as it always is, the consumers end up footing the bill, not the companies. The companies, including Apple, will simply raise their prices to cover the tax/tariff, whatever you want to call it. Apple may lose a few sales over this but they won't lose any money. We the consumer always ends up paying for these little fights between countries. 

    As we've all said before, Apple pays the taxes it's required to pay. They can't help the fact that EU countries sometimes don't want to go along with the EU board. For those in the EU, which countries end up with all the extra money? I doubt it's split fairly.
    JFC_PAelijahgp-dogwilliamlondon
  • Reply 6 of 72
    cat52cat52 Posts: 38member
    Lovely to see a US President look after American interests.

    And this really shouldn't be seen as a left/right issue, although in today's political climate, I'm sure it will be.
    edited July 10 williamlondonSpamSandwich
  • Reply 7 of 72
    rob53rob53 Posts: 2,074member
    cat52 said:
    Lovely to see a US President look after American interests.

    And this really shouldn't be seen as a left/right issue, although in today's political climate, I'm sure it will be.
    Is he really looking after the interests of American consumers, American companies or just certain financial groups? We know this will end up costing American and French consumers more money to purchase a wide variety of products. Who actually gets all the levies and tariffs? 
    p-dogmuthuk_vanalingamCarnageGeorgeBMacronn
  • Reply 8 of 72
    cat52cat52 Posts: 38member
    rob53 said:
    cat52 said:
    Lovely to see a US President look after American interests.

    And this really shouldn't be seen as a left/right issue, although in today's political climate, I'm sure it will be.
    Is he really looking after the interests of American consumers, American companies or just certain financial groups? We know this will end up costing American and French consumers more money to purchase a wide variety of products. Who actually gets all the levies and tariffs? 
    Well, the hope is that once the French realize they can't implement a 3% tax (on revenue, not profits mind you) on primarily American companies without facing some sort of reprisal, then they drop the idea altogether. If so, then everybody wins.
    entropyswilliamlondonanantksundaram
  • Reply 9 of 72
    How dare France try to level the playing field.  

    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    p-doghenrybaygenovelleLatkoirelandCarnageGeorgeBMacwilliamlondonronnjony0
  • Reply 10 of 72
    entropysentropys Posts: 1,801member
    How dare France try to level the playing field.  

    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    If US and other foreign corporates were “dodging” tax the solution would be to close the loophole. That France isn’t doing so and instead proposing a new tax suggests there is no dodging and France is exercising its usual protectionist approach to justify its over regulated inefficiencies. Any French company caught up in this tax would be looked after in other ways. In other words, France in reality wants to tip the playing field to make better companies than their domestic mates run uphill.
    cat52henrybayradarthekatwilliamlondonGG1anantksundaram
  • Reply 11 of 72
    cat52cat52 Posts: 38member
    entropys said:
    How dare France try to level the playing field.  

    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    If US and other foreign corporates were “dodging” tax the solution would be to close the loophole. That France isn’t doing so and instead proposing a new tax suggests there is no dodging and France is exercising its usual protectionist approach to justify its over regulated inefficiencies. Any French company caught up in this tax would be looked after in other ways. In other words, France in reality wants to tip the playing field to make better companies than their domestic mates run uphill.
    Exactly.

    And the multinationals run a lot of their profits through Ireland, which isn't a tax haven, but merely has a lower corporate tax rate than countries such as Germany or France. And God forbid anyone should pay less tax than the French.
    edited July 10 radarthekatentropyswilliamlondonanantksundaram
  • Reply 12 of 72
    genovellegenovelle Posts: 972member
    cat52 said:
    entropys said:
    How dare France try to level the playing field.  

    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    If US and other foreign corporates were “dodging” tax the solution would be to close the loophole. That France isn’t doing so and instead proposing a new tax suggests there is no dodging and France is exercising its usual protectionist approach to justify its over regulated inefficiencies. Any French company caught up in this tax would be looked after in other ways. In other words, France in reality wants to tip the playing field to make better companies than their domestic mates run uphill.
    Exactly.

    And the multinationals run a lot of their profits through Ireland, which isn't a tax haven, but merely has a lower corporate tax rate than countries such as Germany or France. And God forbid anyone should pay less tax than the French.
    Well to tax what is earned in France sounds reasonable to me. Foreign companies have to pay taxes on revenue earned here in the US. 
    seanjirelandGeorgeBMacwilliamlondonronn
  • Reply 13 of 72
    cat52cat52 Posts: 38member
    genovelle said:
    cat52 said:
    entropys said:
    How dare France try to level the playing field.  

    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    If US and other foreign corporates were “dodging” tax the solution would be to close the loophole. That France isn’t doing so and instead proposing a new tax suggests there is no dodging and France is exercising its usual protectionist approach to justify its over regulated inefficiencies. Any French company caught up in this tax would be looked after in other ways. In other words, France in reality wants to tip the playing field to make better companies than their domestic mates run uphill.
    Exactly.

    And the multinationals run a lot of their profits through Ireland, which isn't a tax haven, but merely has a lower corporate tax rate than countries such as Germany or France. And God forbid anyone should pay less tax than the French.
    Well to tax what is earned in France sounds reasonable to me. Foreign companies have to pay taxes on revenue earned here in the US. 
    I see your point but if a legal loophole exists whereby a company can pay a lower tax in another jurisdiction, should they not take advantage of it?

    So if the French don't like Apple paying taxes in Ireland, the proper solution would be to close that loophole as someone here has mentioned before.  Instead however the French are proposing a 3% tax on revenues, which doesn't take into account whether the company in question is even turning a profit there.  So the French solution is clumsy at best.

    Another solution open to the French is to lower their own tax rate so as to make it more competitive with Ireland's.

    Point being the French have several options at their disposal, and they are choosing arguably the worst one.  For instance what would prevent them from increasing this new tax on revenue from 3% to 5% in two years' time? For the history of tax rates (especially in Europe) is that once a tax is introduced, it only goes higher in subsequent years.

    edited July 10 entropyswilliamlondonGG1anantksundaram
  • Reply 14 of 72
    22july201322july2013 Posts: 741member
    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    I'm sure you don't claim every tax credit and tax break on your income tax form, because that would be immoral. Right?

    How come you're allowed to claim every financial benefit but corporations aren't? Why are you special and different?

    Apple doesn't own itself. Its stockholders own it. Little people. You probably have Apple stock without knowing it. Through your bank and your pension and your investments. You are Apple.
    edited July 11 williamlondonanantksundaramcat52
  • Reply 15 of 72
    Google is a great target because of the way that they are structured in Europe. Despite having sales people in each country, invoices are issued from Ireland. That allows them to say that they make NO profit in that country and their costs are used to write of any tax liability in that country.

    Then the Licensing (cough cough) agreements that Starbucks use to ensure that they pay next to no corporation taxes anywhere but in Luxembourg.

    These are legal but ethically they suck big time.

    Apple is a different case because they have to pay VAT to the local governments where they have shops. That Tax can't be hidden/moved.deferred unlike Google and their Irish Invoices.

    It is all a mess and clearly needs sorting out. AFAIK Europe in general exports more to the USA.
    croprirelandronn
  • Reply 16 of 72
    croprcropr Posts: 954member
    Google is a great target because of the way that they are structured in Europe. Despite having sales people in each country, invoices are issued from Ireland. That allows them to say that they make NO profit in that country and their costs are used to write of any tax liability in that country.

    Then the Licensing (cough cough) agreements that Starbucks use to ensure that they pay next to no corporation taxes anywhere but in Luxembourg.

    These are legal but ethically they suck big time.

    Apple is a different case because they have to pay VAT to the local governments where they have shops. That Tax can't be hidden/moved.deferred unlike Google and their Irish Invoices.

    It is all a mess and clearly needs sorting out. AFAIK Europe in general exports more to the USA.
    Your statement is pretty correct, except for the VAT part.  VAT is paid by the end customer but is collected by the selling company.  So Apple does not pay VAT, it collects the VAT on behalf of the government.   And if you are an end customer you do pay VAT on the product/services you buy from Google Ireland. 

    The goal of newly proposed tax is to make corporations to pay taxes for digital goods in the country of the end customer and not in the country where the corporate is "selling".  While I can agree with this goal, I don't agree with the way it is implemented: taxing companies on turn over iso. profit is a shitty idea.
     
    Carnage
  • Reply 17 of 72
    seanjseanj Posts: 62member
    cat52 said:
    genovelle said:
    cat52 said:
    entropys said:
    How dare France try to level the playing field.  

    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    If US and other foreign corporates were “dodging” tax the solution would be to close the loophole. That France isn’t doing so and instead proposing a new tax suggests there is no dodging and France is exercising its usual protectionist approach to justify its over regulated inefficiencies. Any French company caught up in this tax would be looked after in other ways. In other words, France in reality wants to tip the playing field to make better companies than their domestic mates run uphill.
    Exactly.

    And the multinationals run a lot of their profits through Ireland, which isn't a tax haven, but merely has a lower corporate tax rate than countries such as Germany or France. And God forbid anyone should pay less tax than the French.
    Well to tax what is earned in France sounds reasonable to me. Foreign companies have to pay taxes on revenue earned here in the US. 
    I see your point but if a legal loophole exists whereby a company can pay a lower tax in another jurisdiction, should they not take advantage of it?

    So if the French don't like Apple paying taxes in Ireland, the proper solution would be to close that loophole as someone here has mentioned before.  Instead however the French are proposing a 3% tax on revenues, which doesn't take into account whether the company in question is even turning a profit there.  So the French solution is clumsy at best.

    Another solution open to the French is to lower their own tax rate so as to make it more competitive with Ireland's.

    Point being the French have several options at their disposal, and they are choosing arguably the worst one.  For instance what would prevent them from increasing this new tax on revenue from 3% to 5% in two years' time? For the history of tax rates (especially in Europe) is that once a tax is introduced, it only goes higher in subsequent years.

    The French and other countries in the EU can’t stop revenues and profits made in their countries and then being booked to lower tax regimes like Ireland and Luxembourg because EU regulations prevent them. It’s no accident that Jean-Claude Junker, current President of the EU, came up with this tax ruse when he was Prime Minister of Luxembourg (before being forced to resign over a security scandal). There’s nothing as corrupt as the unelected bureaucrats running the EU.
    ronncat52
  • Reply 18 of 72
    shrekshrek Posts: 7member
    I don't see that this is somehow against US companies. Every company with more that 750 mln revenue must pay it. As article states among them are companies from other countries. As US is the largest economy in the world it's quite natural that there are more american companies among them.

    I think that France as independent country have right to impose whatever taxes it chooses (in line with commitments given to EU, WTO, bilateral trade agreements etc).

    Every European company which have meaningful sales revenue (in my country for example 40K euros per year) is subject to VAT (value added tax). Tax rate differ by countries and it can be as low as 7.7% ins Switzerland (not member of EU) and as high as 27% in Hungary, average is around 20%. Every company which is subject to VAT tax must pay this tax based on sales revenue. As always there are lot of details - you can deduct VAT you have paid to others and essentially (not counting labour cost) you have to pay this rate only on 'value added' (a.k.a margin/markup) part. You pay VAT on sales both to consumers and companies. Export is generally VAT free.

    I don't see this tax hike (from 20% to 23% in France) something very significant nor aimed against US companies.

    irelandronnspice-boy
  • Reply 19 of 72
    LatkoLatko Posts: 398member
    Tax-dodging multinationals have an unfair advantage over small local companies who can’t base their operations in tax havens.
    I'm sure you don't claim every tax credit and tax break on your income tax form, because that would be immoral. Right?

    How come you're allowed to claim every financial benefit but corporations aren't? Why are you special and different?

    Apple doesn't own itself. Its stockholders own it. Little people. You probably have Apple stock without knowing it. Through your bank and your pension and your investments. You are Apple.
    Your statements show an immense incomplete vision on contributions/benefits in general and taxes due but evaded by multinational companies (versus individual citizens) in particular when it comes to a global scale.
    ronn
  • Reply 20 of 72
    irelandireland Posts: 17,649member
    About time someone start taxing mega-rich corporations appropriately. This is how the future world thrives, by taxing mega-rich companies more. Btw, these mega rich companies are mega-rich because people give them lots of money. It’s fair they give back. It’s telling a billionaire is protecting the mega-rich.
    edited July 11 avon b7ronnspice-boy
Sign In or Register to comment.