I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
So imagine if every UN country charged Apple an additional 3% on gross revenue.
As long as Apple's competitors are getting the same treatment, what's wrong with that?
Apple avoid a whole lot more than 3% with their financial arrangements.
The “financial arrangements” you speak of are completely legal. Governments in the EU should have the b4lls to change their laws to make them illegal.
I didn't say they weren't illegal. And loopholes are not always easily closed, especially in matters that cross national borders. On top of that, loopholes may come about as a consequence of a policy that provides some good aspects, in which case closing the loophole may be overall detrimental. In which case a mitigation such as a targetted supplementary tax may be more appropriate.
What they’re doing with these revenue taxes — and if egged on by tax-paying citizens of their countries — is utterly hypocritical. Why don’t you tell us: If you do pay taxes, do you pay a dollar (or euro) more than is required under the law? If you do not pay more, with all due respect, you should not render an opinion on this topic.
Well that's a pile of hot nonsense. Do you pay more? I'm going to hazard a guess at not, so why are you rendering an opinion? Besides which, no one is saying Apple (and the other companies involved) should pay more tax than they owe, this thread is about a new tax to increase the amount that they owe. Furthermore, what difference do my personal tax arrangements make to a discussion on French tax as a political discussion. Even if there was any so-called "hypocrisy" (there isn't), it wouldn't make a blind bit of difference.
In short, stop deflecting, it's moronically transparent, and pretty pathetic.
1. Apple get criticised 2. Wah! Stop criticing Apple and change the laws! 3. Laws get changed 4. Wah! How dare you change the laws, this is discriminatory against Apple!
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
So imagine if every UN country charged Apple an additional 3% on gross revenue.
Where would the problem be? It's a decision each sovereign state must weigh up. And in this case it isn't 'Apple', it's companies that go above a specific limit.
Taxing revenues is unheard of.
Sales tax is unheard of? Where are you from?
Sales taxes are not imposed on, or paid by companies. Get with it...
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
So imagine if every UN country charged Apple an additional 3% on revenue.
It's not clear to me if the 3% tax would be on all of Apple's revenue or just its services revenue. Is it clear to others?
Digital revenue generated in France.
Does that include revenues from digital hardware sold in France?
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
So imagine if every UN country charged Apple an additional 3% on gross revenue.
As long as Apple's competitors are getting the same treatment, what's wrong with that?
Apple avoid a whole lot more than 3% with their financial arrangements.
The “financial arrangements” you speak of are completely legal. Governments in the EU should have the b4lls to change their laws to make them illegal.
I didn't say they weren't illegal. And loopholes are not always easily closed, especially in matters that cross national borders. On top of that, loopholes may come about as a consequence of a policy that provides some good aspects, in which case closing the loophole may be overall detrimental. In which case a mitigation such as a targetted supplementary tax may be more appropriate.
What they’re doing with these revenue taxes — and if egged on by tax-paying citizens of their countries — is utterly hypocritical. Why don’t you tell us: If you do pay taxes, do you pay a dollar (or euro) more than is required under the law? If you do not pay more, with all due respect, you should not render an opinion on this topic.
Well that's a pile of hot nonsense. Do you pay more? I'm going to hazard a guess at not, so why are you rendering an opinion? Besides which, no one is saying Apple (and the other companies involved) should pay more tax than they owe, this thread is about a new tax to increase the amount that they owe. Furthermore, what difference do my personal tax arrangements make to a discussion on French tax as a political discussion. Even if there was any so-called "hypocrisy" (there isn't), it wouldn't make a blind bit of difference.
In short, stop deflecting, it's moronically transparent, and pretty pathetic.
I don’t — and do not ever intend to — pay 1¢ more than is required. I consider it foolish to do so. That behavior is entirely consistent with what I think companies should also do.
That is the opposite of being hypocritical (unlike with those who don’t themselves want to pay more than they are required to, but want others to do so). And as to your point about Apple not paying the taxes it “owes”, where/how did you come to that conclusion? Do you know something that Tim Cook doesn’t? Apple pays every cent it owes in taxes, afaik. There is some money sitting in escrow that is still pending final resolution of s major case in the EU. But even if Apple loses that case (which is not certain), they would still only be paying what they “owe.”
All France is doing here is creating a new and weird boondoggle, and inviting retaliation, to everyone’s detriment.
“Some”? 3% of revenues for a company with a 20% pre-tax profit margin is a 15% tax rate. For a company with 3% margin, it’s a 100% tax rate.
You like spending other people’s money, eh?
Sorry, but you are mixing up national economy with international. Those are two totally different things. Company revenue, -profits, and -taxes are all part of one country’s economy system, while sales are taking place inside another country’s economy system. They definitely do not connect in the same way as if they were taking place in the same country/state. Which is also why these French taxes won’t necessarily affect consumer prices in France any more than in all other countries.
To calculate the profit you need to deduct the costs connected to only the sales for that particular foreign country – which can be tough. But for digital services that would basically be the cost of extra sales plus some small extra data warehouse costs, which amounts to nearly nothing in most cases above. This is the reason why these taxes are based on revenue rather than profit.
BTW, your calculations aren’t correctly expressed either. Instead of 20% profit, the company you are describing would make 17% profit for sales on that particular market. That’s it – nothing else.
And there are no companies in this league selling digital services at 3% margin on the additional sales connected to an additional market. Software and data doesn’t cost anything to clone – remember? The only extra cost is typically some small additional marketing costs, or not even that. Margins keep increasing for every data unit sold. So we are talking about very very high margins here.
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
On one hand you may be correct, but on the other hand (one you were not speaking about...) taxes just in general are outrageously high and collecting these is just another failed attempt at governing. These taxes are a burden put on citizens not out of fair altruism by recouping money lost through ‘loopholes’ in tax laws, but rather out of a general attitude of turning toward increased taxes in an attempt to make up for inefficiency and greed.
We’ve gotten so used to this that we’re barely phased by it (outside of temporary moaning and complaining) even though everyone knows this is just a money grab.
I firmly believe the government can be run generously with a 10% income tax collection (and no sales tax). We just need to change our attitudes about tax and the responsibilities of the government.
I'm not sure which country you are from, but looking at high quality health care and affordable education provided in most of the European Union, it bears evidence that high taxes, when used the right way, do pay social dividends.
Coming to this particular topic, it appears that even if the corporation tax is 5% and there is a legal loophole to pay 4% instead, companies still tend to try to save that 1%. Looking that way, this is a sane solution.
There are no 'too high' or 'too low' taxes. A society needs some revenue to cover its social expenses and this society has to look after itself, just as corporations look at their own profit motive. Taxation is a good way to implement this.
Corporate taxes are ultimately paid by the citizens in the taxed country. Just as with tariffs on imports. Just because it’s an indirect tax doesn’t mean you’re not paying it. It is simply a different means of collecting taxes from citizens.
Only an uniformed person would think otherwise.
No, that is wrong. See my other comment below on your previous assumptions that were mixing up national economy theory with international.
“Some”? 3% of revenues for a company with a 20% pre-tax profit margin is a 15% tax rate. For a company with 3% margin, it’s a 100% tax rate.
You like spending other people’s money, eh?
Sorry, but you are mixing up national economy with international. Those are two totally different things. Company revenue, -profits, and -taxes are all part of one country’s economy system, while sales are taking place inside another country’s economy system. They definitely do not connect in the same way as if they were taking place in the same country/state. Which is also why these French taxes won’t necessarily affect consumer prices in France any more than in all other countries.
To calculate the profit you need to deduct the costs connected to only the sales for that particular foreign country – which is really tough. But for digital services that would basically be the cost of sales plus some small extra data warehouse costs, which amounts to nearly nothing in the cases above.
Your post makes no sense at all, I am afraid. Just no sense, at multiple levels.
1. Apple get criticised 2. Wah! Stop criticing Apple and change the laws! 3. Laws get changed 4. Wah! How dare you change the laws, this is discriminatory against Apple!
So tiresome, you lot.
This is a non sequitur. No one here is arguing whether countries can impose laws. Of course they can. But (1) corporate taxation is not the same as ‘law’ in this setting since it’s happening in the context of an EU-wide regime of taxation; (2) the manner of taxation is unheard of and stupid (see my prior reply to you, above); (3) it inevitably invites retaliation, leading to “beggar-thy-neighbor” kinds of outcomes that is to everyone’s detriment.
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
On one hand you may be correct, but on the other hand (one you were not speaking about...) taxes just in general are outrageously high and collecting these is just another failed attempt at governing. These taxes are a burden put on citizens not out of fair altruism by recouping money lost through ‘loopholes’ in tax laws, but rather out of a general attitude of turning toward increased taxes in an attempt to make up for inefficiency and greed.
We’ve gotten so used to this that we’re barely phased by it (outside of temporary moaning and complaining) even though everyone knows this is just a money grab.
I firmly believe the government can be run generously with a 10% income tax collection (and no sales tax). We just need to change our attitudes about tax and the responsibilities of the government.
I'm not sure which country you are from, but looking at high quality health care and affordable education provided in most of the European Union, it bears evidence that high taxes, when used the right way, do pay social dividends.
Coming to this particular topic, it appears that even if the corporation tax is 5% and there is a legal loophole to pay 4% instead, companies still tend to try to save that 1%. Looking that way, this is a sane solution.
There are no 'too high' or 'too low' taxes. A society needs some revenue to cover its social expenses and this society has to look after itself, just as corporations look at their own profit motive. Taxation is a good way to implement this.
Corporate taxes are ultimately paid by the citizens in the taxed country. Just as with tariffs on imports. Just because it’s an indirect tax doesn’t mean you’re not paying it. It is simply a different means of collecting taxes from citizens.
Only an uniformed person would think otherwise.
No, that is wrong. See my other comment below on your previous assumptions that were mixing up national economy theory with international.
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
So imagine if every UN country charged Apple an additional 3% on gross revenue.
Where would the problem be? It's a decision each sovereign state must weigh up. And in this case it isn't 'Apple', it's companies that go above a specific limit.
Taxing revenues is unheard of.
Sales tax is unheard of? Where are you from?
Sales taxes are not imposed on, or paid by companies. Get with it...
Since you maintain that all corporate taxes are ultimately paid by consumers I'd be fascinated to hear what you think the meaningful distinction is.
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
So imagine if every UN country charged Apple an additional 3% on gross revenue.
As long as Apple's competitors are getting the same treatment, what's wrong with that?
Apple avoid a whole lot more than 3% with their financial arrangements.
The “financial arrangements” you speak of are completely legal. Governments in the EU should have the b4lls to change their laws to make them illegal.
I didn't say they weren't illegal. And loopholes are not always easily closed, especially in matters that cross national borders. On top of that, loopholes may come about as a consequence of a policy that provides some good aspects, in which case closing the loophole may be overall detrimental. In which case a mitigation such as a targetted supplementary tax may be more appropriate.
What they’re doing with these revenue taxes — and if egged on by tax-paying citizens of their countries — is utterly hypocritical. Why don’t you tell us: If you do pay taxes, do you pay a dollar (or euro) more than is required under the law? If you do not pay more, with all due respect, you should not render an opinion on this topic.
Well that's a pile of hot nonsense. Do you pay more? I'm going to hazard a guess at not, so why are you rendering an opinion? Besides which, no one is saying Apple (and the other companies involved) should pay more tax than they owe, this thread is about a new tax to increase the amount that they owe. Furthermore, what difference do my personal tax arrangements make to a discussion on French tax as a political discussion. Even if there was any so-called "hypocrisy" (there isn't), it wouldn't make a blind bit of difference.
In short, stop deflecting, it's moronically transparent, and pretty pathetic.
I don’t — and do not ever intend to — pay 1¢ more than is required. I consider it foolish to do so. That behavior is entirely consistent with what I think companies should also do.
That is the opposite of being hypocritical (unlike with those who don’t themselves want to pay more than they are required to, but want others to do so). And as to your point about Apple not paying the taxes it “owes”, where/how did you come to that conclusion? Do you know something that Tim Cook doesn’t? Apple pays every cent it owes in taxes, afaik. There is some money sitting in escrow that is still pending final resolution of s major case in the EU. But even if Apple loses that case (which is not certain), they would still only be paying what they “owe.”
All France is doing here is creating a new and weird boondoggle, and inviting retaliation, to everyone’s detriment.
I honestly have no idea how you've read 'Apple not paying the taxes it “owes”' into what I've said, since I explicitly said the opposite.
Everything else you've said there is moot and uninteresting.
1. Apple get criticised 2. Wah! Stop criticing Apple and change the laws! 3. Laws get changed 4. Wah! How dare you change the laws, this is discriminatory against Apple!
So tiresome, you lot.
This is a non sequitur. No one here is arguing whether countries can impose laws. Of course they can. But (1) corporate taxation is not the same as ‘law’ in this setting since it’s happening in the context of an EU-wide regime of taxation; (2) the manner of taxation is unheard of and stupid (see my prior reply to you, above); (3) it inevitably invites retaliation, leading to “beggar-thy-neighbor” kinds of outcomes that is to everyone’s detriment.
I didn't claim anyone was challenging a countries right to impose laws? Are you having trouble reading my friend?
Also, EU-wide? This only applies to France as it stands.
So the EU is ok with countries writing tax laws to raise taxes on certain companies but prohibits counties from lowering taxes (see Ireland)?
This law has a very clear and specific bracket. It doesn't aid or punish a specific company. If Ireland had lowered the tax rate on a rules basis that applied to a range of companies then that'd probably have been ok too, but they didn't do that.
“Some”? 3% of revenues for a company with a 20% pre-tax profit margin is a 15% tax rate. For a company with 3% margin, it’s a 100% tax rate.
You like spending other people’s money, eh?
Sorry, but you are mixing up national economy with international. Those are two totally different things. Company revenue, -profits, and -taxes are all part of one country’s economy system, while sales are taking place inside another country’s economy system. They definitely do not connect in the same way as if they were taking place in the same country/state. Which is also why these French taxes won’t necessarily affect consumer prices in France any more than in all other countries.
To calculate the profit you need to deduct the costs connected to only the sales for that particular foreign country – which is really tough. But for digital services that would basically be the cost of sales plus some small extra data warehouse costs, which amounts to nearly nothing in the cases above.
Your post makes no sense at all, I am afraid. Just no sense, at multiple levels.
I was afraid it wouldn’t make sense to you, anantksundaram, although I tried to simplify things and use an everyday language. Perhaps you lack some understanding of international economic theory, because this is actually quite straight forward according to the books.
I am surprised that it took EU countries this long to enact these kinds of taxes. It’s common knowledge that Apple (with help from Ireland) took advantage of loopholes in international tax laws to reduce their tax burden. Of course, Apple has done nothing illegal, but it’s completely within each country’s rights to change tax laws to close those loopholes.
On one hand you may be correct, but on the other hand (one you were not speaking about...) taxes just in general are outrageously high and collecting these is just another failed attempt at governing. These taxes are a burden put on citizens not out of fair altruism by recouping money lost through ‘loopholes’ in tax laws, but rather out of a general attitude of turning toward increased taxes in an attempt to make up for inefficiency and greed.
We’ve gotten so used to this that we’re barely phased by it (outside of temporary moaning and complaining) even though everyone knows this is just a money grab.
I firmly believe the government can be run generously with a 10% income tax collection (and no sales tax). We just need to change our attitudes about tax and the responsibilities of the government.
I'm not sure which country you are from, but looking at high quality health care and affordable education provided in most of the European Union, it bears evidence that high taxes, when used the right way, do pay social dividends.
Coming to this particular topic, it appears that even if the corporation tax is 5% and there is a legal loophole to pay 4% instead, companies still tend to try to save that 1%. Looking that way, this is a sane solution.
There are no 'too high' or 'too low' taxes. A society needs some revenue to cover its social expenses and this society has to look after itself, just as corporations look at their own profit motive. Taxation is a good way to implement this.
Corporate taxes are ultimately paid by the citizens in the taxed country. Just as with tariffs on imports. Just because it’s an indirect tax doesn’t mean you’re not paying it. It is simply a different means of collecting taxes from citizens.
Only an uniformed person would think otherwise.
No, that is wrong. See my other comment below on your previous assumptions that were mixing up national economy theory with international.
“Some”? 3% of revenues for a company with a 20% pre-tax profit margin is a 15% tax rate. For a company with 3% margin, it’s a 100% tax rate.
You like spending other people’s money, eh?
Sorry, but you are mixing up national economy with international. Those are two totally different things. Company revenue, -profits, and -taxes are all part of one country’s economy system, while sales are taking place inside another country’s economy system. They definitely do not connect in the same way as if they were taking place in the same country/state. Which is also why these French taxes won’t necessarily affect consumer prices in France any more than in all other countries.
To calculate the profit you need to deduct the costs connected to only the sales for that particular foreign country – which is really tough. But for digital services that would basically be the cost of sales plus some small extra data warehouse costs, which amounts to nearly nothing in the cases above.
Your post makes no sense at all, I am afraid. Just no sense, at multiple levels.
It's a little confusingly worded, but in there is the heart of the problem, profit doesn't really mean anything on a national level when you're talking about multi-national companies, they have too many avenues to obfuscate that, especially in the EU because of its free movement rules. That's exactly why throwing a couple of extra percentage points on corporation tax in France wouldn't be effective, because Apple books the majority of its corporate profits outside of France.
It's a structural problem in the EU (not wholly dissimilar from cross-state business in the USA) that is a long way from being solved, but this French solution is an interesting prospect.
It isn’t a corporate tax. It’s an excise or sales tax. It applies to revenue from a particular good, not company profit. These kinds of taxes distort the market, are inefficient (you have to work out if it applies to one good or another), and the consumer pays in the end. And it is also over or under a general consumption tax. A tax on top of a tax.
So the EU is ok with countries writing tax laws to raise taxes on certain companies but prohibits counties from lowering taxes (see Ireland)?
Sure. The EU’s purpose is for France and Germany to run the show how they have always wanted. If they couldn’t do it militarily, they will do it bureaucratically.
If only they could control that Magna Carta loving bunch of little shopkeepers on their little island across the Channel.
Comments
Well that's a pile of hot nonsense. Do you pay more? I'm going to hazard a guess at not, so why are you rendering an opinion?
Besides which, no one is saying Apple (and the other companies involved) should pay more tax than they owe, this thread is about a new tax to increase the amount that they owe.
Furthermore, what difference do my personal tax arrangements make to a discussion on French tax as a political discussion. Even if there was any so-called "hypocrisy" (there isn't), it wouldn't make a blind bit of difference.
In short, stop deflecting, it's moronically transparent, and pretty pathetic.
2. Wah! Stop criticing Apple and change the laws!
3. Laws get changed
4. Wah! How dare you change the laws, this is discriminatory against Apple!
So tiresome, you lot.
That is the opposite of being hypocritical (unlike with those who don’t themselves want to pay more than they are required to, but want others to do so). And as to your point about Apple not paying the taxes it “owes”, where/how did you come to that conclusion? Do you know something that Tim Cook doesn’t? Apple pays every cent it owes in taxes, afaik. There is some money sitting in escrow that is still pending final resolution of s major case in the EU. But even if Apple loses that case (which is not certain), they would still only be paying what they “owe.”
All France is doing here is creating a new and weird boondoggle, and inviting retaliation, to everyone’s detriment.
To calculate the profit you need to deduct the costs connected to only the sales for that particular foreign country – which can be tough. But for digital services that would basically be the cost of extra sales plus some small extra data warehouse costs, which amounts to nearly nothing in most cases above. This is the reason why these taxes are based on revenue rather than profit.
BTW, your calculations aren’t correctly expressed either. Instead of 20% profit, the company you are describing would make 17% profit for sales on that particular market. That’s it – nothing else.
And there are no companies in this league selling digital services at 3% margin on the additional sales connected to an additional market. Software and data doesn’t cost anything to clone – remember? The only extra cost is typically some small additional marketing costs, or not even that. Margins keep increasing for every data unit sold. So we are talking about very very high margins here.
(Gita Gopinath is a well-known economist, and currently chief economist for the IMF.)
I honestly have no idea how you've read 'Apple not paying the taxes it “owes”' into what I've said, since I explicitly said the opposite.
Everything else you've said there is moot and uninteresting.
I didn't claim anyone was challenging a countries right to impose laws? Are you having trouble reading my friend?
Also, EU-wide? This only applies to France as it stands.
It's a structural problem in the EU (not wholly dissimilar from cross-state business in the USA) that is a long way from being solved, but this French solution is an interesting prospect.
Apple should immediately raise all prices on all products and services in France by at least 10% to compensate for this Frenchy tax.
These kinds of taxes distort the market, are inefficient (you have to work out if it applies to one good or another), and the consumer pays in the end. And it is also over or under a general consumption tax. A tax on top of a tax.
Typical French though.
If only they could control that Magna Carta loving bunch of little shopkeepers on their little island across the Channel.