AFAIK no one connected with Google ever claimed they had no UK sales staff.
What I did find was a staffer claim in front of Parliament that their UK sales staff made no sales in the UK and thus owed no additional taxes, something that would have to be based on some ridiculous technicality if true. In any event it's a lousy argument to use for tax avoidance even if it's possibly legal.
EDIT: Thanks TimGriff
I see the technicality now. While Google admitted to having sales staff in the UK they say they were employees of their Irish subsidiary and any sales were made by the Irish company, not anyone working for a UK based company. Ridiculous IMO but probably legal based on everything written about tax avoidance efforts by some of the huge techs (and other multinationals).
"The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work."
You have your head completely buried in sand on this one, Marvin.
The opening paragraph you quoted pretty much invalidates the whole article:
"The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work."
If no one apparently knows anything then how do they know it's out of control? Pretty shoddy sensationalist journalism. At the end of the day, every employee has to be paid and that money comes from the government budget:
Everybody knows the military spending of the US is excessive but the budget for it is accounted for.
You still haven't defined what you consider to be a small government. Use the pie chart that covers about $3.7t to decide what should be cut. Of course you can just take away state pensions for the elderly as well as healthcare but then what? Just leave them to suffer and eventually die. As long as it's not your family it doesn't matter.
I'm not promoting that size of a budget, I'm just pointing out that's the social need that exists. To fix it, taking away the spending is not the answer, you need to take away the need. Fixing healthcare costs includes laws restricting smoking or limiting unhealthy quantities of sugar/salt but you don't like those limitations because they impact your freedom. Fixing welfare dependency includes upwards mobility, which means reasonable salaries to stay out of debt, it means trying as hard as possible to have as many jobs as possible but you don't think people are owed jobs and don't care how little people are paid.
You can't condemn taxation and spending if you are for policies that promote poverty and ill health because the latter causes the former.
Ultimately the devs just paying the tax that they have to pay and it's competition which says what they can charge for the app.
More than 90% of apps are free and over 95% of all App Store revenue for Apple and Google is from IAPs. This mainly affects pricing of IAPs. If an IAP was say 99c before with 15% tax and moves to 20% tax, then it would become 1.03 euros or the developer absorbs a small loss.
Not just the EU. The UK is clamouring for corporation tax from apple. Sales tax makes some sense. Taxing corporations where they aren't is illegal lunacy.
However it's consumers not companies who pay sales tax.
That's very true and I agree, since unless there was some huge effort to harmonise tax law, big companies would end up paying corporation tax in their base country (i.e. USA for Apple) and in the country they're selling to. That's not fair by a long shot.
By any measure, the EU is an utter failure. Germany should be the first to flee that sinking ship.
The Euro is a failure especially, it's the main cause of the EU's problems; things in Greece are so expensive relative to wages that no one can afford them, but in Germany products are relatively cheap. The reason Germany likes the EU so much is partly that they seem to see themselves politically as the leader of Europe, and the failing Euro means it's cheap to buy German made products.
Usually the currency of a country with a weak economy will fall, so it becomes cheap to import things from the weak country, bringing lots of money into the weak economy. Vice versa applies for countries with a strong economy like Germany; where a strong currency makes it expensive to buy from there, ultimately balancing out the economies somewhat. Since Germany's economy is mostly manufacturing and export based, it's good for them for exports to be cheap, so they like the Euro.
The cross-country Euro means the natural balancing can't happen, and since wages are not equal across the EU, it's very expensive to buy things unless you're in a rich economy. In Spain the prices of fuel, food and other products has risen rapidly in the last few years, but the average wage is pretty much static, or declining. If they were still using the Peseta, it'd be cheap to buy things from Spain, ultimately making their economy grow.
Oh and there's the little fact that most people in the UK at least, don't like their laws being made up by the failed, unelected ex-prime ministers who make up 90% of the European Commission.
Again you are missing where the revenue is really created and when. The sales team isn't generating revenue, the pay per view or pay per click is.
Pay per view or pay per click is a service being delivered it isn't revenue being generated. If I hired a boat to deliver something to another country and give them performance related pay based on how quickly they get it there, the revenue wasn't generated at the destination or the part of the ocean where they made up time. It was made where I hired the boat and crew.
The same as a TV channel doesn't generate ad revenue from when people see the ads. It's generated from the company that pays for the ad, the amount they pay might be variable depending on the number of people that see it. But its generated from the people that pay, not the people that view.
Pay per view or pay per click is a service being delivered it isn't revenue being generated. If I hired a boat to deliver something to another country and give them performance related pay based on how quickly they get it there, the revenue wasn't generated at the destination or the part of the ocean where they made up time. It was made where I hired the boat and crew.
The same as a TV channel doesn't generate ad revenue from when people see the ads. It's generated from the company that pays for the ad, the amount they pay might be variable depending on the number of people that see it. But its generated from the people that pay, not the people that view.
It's charged to the people who pay. The value added is the IP.
The cost to the advertiser is based on the number of people who view. Or click. The value -- the word I use rather than cost - is added when people view or click the advertisement. Where the viewers are doesnt matter because what's driving viewers is the Website, what's on it, and the intellectual property which drives them there. Top Gear or search results, don't matter.
Corporation tax is taxed where value is added. Were they not so China and India and the U.S. would clean up and the tiny UK would lose significant tax venues.
This post is incorrect on one point. The current EU ( = Apple Luxembourg) tax rate for apps is 15%, not 3%. Moreover, as of Jan 1 2015 Luxembourg raises this taxrate to 17% for its inhabitants. So tax rates for apps are up all over Europe.
Additionally the VAT rates charged for iTunes purchases are currently 23%.
Apple's iTunes servers are base in Ireland. Apple could charge the VAT rates applicable in Luxembourg if they wanted to but they decided to charge EU customers the Irish VAT rate.
The changes should benefit the majority of customers
Why do I pay 23% VAT on Electronic Software Download orders and other products which are classified as services?
The VAT rate for Apple customers who purchase Electronic Software Downloads or other Apple products which are classified as services under EU VAT law will be 23% Irish VAT. This is because the place of supply of these products under EU VAT law is Ireland as the country from where Apple Distribution International makes these supplies.
Additionally the VAT rates charged for iTunes purchases are currently 23%.
Apple's iTunes servers are base in Ireland. Apple could charge the VAT rates applicable in Luxembourg if they wanted to but they decided to charge EU customers the Irish VAT rate.
The changes should benefit the majority of customers
<h4 style="font:bold 12px/17px 'Lucida Grande', Helvetica, Arial, Verdana, sans-serif;margin:0px 0px 18px;padding:0px;text-align:left;color:rgb(51,51,51);text-indent:0px;letter-spacing:normal;word-spacing:0px;">Why do I pay 23% VAT on Electronic Software Download orders and other products which are classified as services?</h4>
<p style="font:10.85px/17px 'Lucida Grande', Helvetica, Arial, Verdana, sans-serif;margin:0px 0px 18px;padding:0px;text-align:left;color:rgb(51,51,51);text-indent:0px;letter-spacing:normal;word-spacing:0px;">The VAT rate for Apple customers who purchase Electronic Software Downloads or other Apple products which are classified as services under EU VAT law will be 23% Irish VAT. This is because the place of supply of these products under EU VAT law is Ireland as the country from where Apple Distribution International makes these supplies.</p>
I think those downloads are directly from the apple.com website.Itunes is Luxembourg based.
Comments
AFAIK no one connected with Google ever claimed they had no UK sales staff.
What I did find was a staffer claim in front of Parliament that their UK sales staff made no sales in the UK and thus owed no additional taxes, something that would have to be based on some ridiculous technicality if true. In any event it's a lousy argument to use for tax avoidance even if it's possibly legal.
EDIT: Thanks TimGriff
I see the technicality now. While Google admitted to having sales staff in the UK they say they were employees of their Irish subsidiary and any sales were made by the Irish company, not anyone working for a UK based company. Ridiculous IMO but probably legal based on everything written about tax avoidance efforts by some of the huge techs (and other multinationals).
http://uk.reuters.com/article/2013/05/01/uk-tax-uk-google-specialreport-idUKBRE94005R20130501
Again you are missing where the revenue is really created and when. The sales team isn't generating revenue, the pay per view or pay per click is.
So to be clear.
BBC America produces content.
The content and the IP is generated in the UK.
The parent company is BBC UK.
A sales team will, however, be where the customers are. ( see: http://advertising.bbcworldwide.com/home/advertisewithus/bbc-platforms/bbc-america)
Who pays the corporation tax? Answer: BBC UK.
There is no other way, and to me it isn't that confusing. Governments in the consumer countries can get the sales tax or VAT.
The opening paragraph you quoted pretty much invalidates the whole article:
"The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work."
If no one apparently knows anything then how do they know it's out of control? Pretty shoddy sensationalist journalism. At the end of the day, every employee has to be paid and that money comes from the government budget:
Everybody knows the military spending of the US is excessive but the budget for it is accounted for.
You still haven't defined what you consider to be a small government. Use the pie chart that covers about $3.7t to decide what should be cut. Of course you can just take away state pensions for the elderly as well as healthcare but then what? Just leave them to suffer and eventually die. As long as it's not your family it doesn't matter.
I'm not promoting that size of a budget, I'm just pointing out that's the social need that exists. To fix it, taking away the spending is not the answer, you need to take away the need. Fixing healthcare costs includes laws restricting smoking or limiting unhealthy quantities of sugar/salt but you don't like those limitations because they impact your freedom. Fixing welfare dependency includes upwards mobility, which means reasonable salaries to stay out of debt, it means trying as hard as possible to have as many jobs as possible but you don't think people are owed jobs and don't care how little people are paid.
You can't condemn taxation and spending if you are for policies that promote poverty and ill health because the latter causes the former.
More than 90% of apps are free and over 95% of all App Store revenue for Apple and Google is from IAPs. This mainly affects pricing of IAPs. If an IAP was say 99c before with 15% tax and moves to 20% tax, then it would become 1.03 euros or the developer absorbs a small loss.
99c price
15% tax = 13c tax, 26c Apple, 60c developer
20% tax = 17c tax, 25c Apple, 57c developer
It won't be higher in every country and it only applies to people making over 100k euros in sales, which is not many people in the App Store.
That's very true and I agree, since unless there was some huge effort to harmonise tax law, big companies would end up paying corporation tax in their base country (i.e. USA for Apple) and in the country they're selling to. That's not fair by a long shot.
The Euro is a failure especially, it's the main cause of the EU's problems; things in Greece are so expensive relative to wages that no one can afford them, but in Germany products are relatively cheap. The reason Germany likes the EU so much is partly that they seem to see themselves politically as the leader of Europe, and the failing Euro means it's cheap to buy German made products.
Usually the currency of a country with a weak economy will fall, so it becomes cheap to import things from the weak country, bringing lots of money into the weak economy. Vice versa applies for countries with a strong economy like Germany; where a strong currency makes it expensive to buy from there, ultimately balancing out the economies somewhat. Since Germany's economy is mostly manufacturing and export based, it's good for them for exports to be cheap, so they like the Euro.
The cross-country Euro means the natural balancing can't happen, and since wages are not equal across the EU, it's very expensive to buy things unless you're in a rich economy. In Spain the prices of fuel, food and other products has risen rapidly in the last few years, but the average wage is pretty much static, or declining. If they were still using the Peseta, it'd be cheap to buy things from Spain, ultimately making their economy grow.
Oh and there's the little fact that most people in the UK at least, don't like their laws being made up by the failed, unelected ex-prime ministers who make up 90% of the European Commission.
Again you are missing where the revenue is really created and when. The sales team isn't generating revenue, the pay per view or pay per click is.
Pay per view or pay per click is a service being delivered it isn't revenue being generated. If I hired a boat to deliver something to another country and give them performance related pay based on how quickly they get it there, the revenue wasn't generated at the destination or the part of the ocean where they made up time. It was made where I hired the boat and crew.
The same as a TV channel doesn't generate ad revenue from when people see the ads. It's generated from the company that pays for the ad, the amount they pay might be variable depending on the number of people that see it. But its generated from the people that pay, not the people that view.
It's charged to the people who pay. The value added is the IP.
The cost to the advertiser is based on the number of people who view. Or click. The value -- the word I use rather than cost - is added when people view or click the advertisement. Where the viewers are doesnt matter because what's driving viewers is the Website, what's on it, and the intellectual property which drives them there. Top Gear or search results, don't matter.
Corporation tax is taxed where value is added. Were they not so China and India and the U.S. would clean up and the tiny UK would lose significant tax venues.
This post is incorrect on one point. The current EU ( = Apple Luxembourg) tax rate for apps is 15%, not 3%. Moreover, as of Jan 1 2015 Luxembourg raises this taxrate to 17% for its inhabitants. So tax rates for apps are up all over Europe.
Additionally the VAT rates charged for iTunes purchases are currently 23%.
Apple's iTunes servers are base in Ireland. Apple could charge the VAT rates applicable in Luxembourg if they wanted to but they decided to charge EU customers the Irish VAT rate.
The changes should benefit the majority of customers
******EDIT**********
http://store.apple.com/uk/help/payments#tax
Why do I pay 23% VAT on Electronic Software Download orders and other products which are classified as services?
The VAT rate for Apple customers who purchase Electronic Software Downloads or other Apple products which are classified as services under EU VAT law will be 23% Irish VAT. This is because the place of supply of these products under EU VAT law is Ireland as the country from where Apple Distribution International makes these supplies.
I think those downloads are directly from the apple.com website.Itunes is Luxembourg based.
iTunes s.à.r.l.
Hi all! I'm new here so bear with me
I have an app that's free. I'm thinking about having the "buy-in-app" feature.
Now, here's the big question. I'm in Chile (South America), and I haven't found any documentation on taxes for the buy-in-app.
I do know that out of the "$X" price that I want to sell my product, I will receive only a "X" percentage of the total. How much does apple hold?
And the greater question is, how much more will I have to pay on taxes, here in Chile?
All help is more than welcome!!!
Thanks!
Paula