Taxing the internet Watch

ThomH97
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Tech companies and those with a largely online presence have long been able to route their profits through low tax nations, enabling them to undercut smaller, physically present businesses on price. The biggest sign of this in the UK is the decline of the high street, with gambling and charity shops popping up, as well as coffee shops able to route their profits as desired as well. In the EU, 'traditional' businesses typically pay 23% tax on their profits, with internet companies around 8 or 9%.

Today, France has imposed a 'digital services tax' on large companies (greater than $750m revenue) that have a sizeable (at least $25m) presence in France. The key thing is it will be on revenue, not profit, so it shouldn't matter what creative accountancy you employ to shift your profits elsewhere - if you make money from a Frenchie, you pay the French government.

This tax will be backdated to the beginning of this year (dunno how that's legit, but I guess they can do what they like), and at 3% of revenue is expected to bring in $400m this year.

Since the companies this will apply to are largely of the USA, Trump hasn't responded well, but several other countries are intending to do similar, such as the UK going for a 2% tax of companies making £500m worldwide, starting in 2020, as well as Spain and Italy.

What do you think of this tax? It is rather late, given how many retailers have had to close, and some people do prefer sitting at home shopping. However, unless you definitely want to wipe out the high street shops, it doesn't seem fair to tax them at a higher rate, and that's before salary, rental and shrinkage costs, among other things.
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barnetlad
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I think that digital companies should not be singled out. There should just be a minimum level of tax payable by large companies, as a percentage of turnover.
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ByEeek
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(Original post by barnetlad)
I think that digital companies should not be singled out. There should just be a minimum level of tax payable by large companies, as a percentage of turnover.
What about large companies that make little or no profit? And I mean genuinely don't make profit. This is just one major difficulty.

One easy solution would be to eliminate tax havens which could easily be done using the threat of sanctions. Sadly though the world is run by the rich who shield their money in tax havens... like Trump.
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da_nolo
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(Original post by ByEeek)
What about large companies that make little or no profit? And I mean genuinely don't make profit. This is just one major difficulty.

One easy solution would be to eliminate tax havens which could easily be done using the threat of sanctions. Sadly though the world is run by the rich who shield their money in tax havens... like Trump.
countries and govt. operate like banks sometimes. lending and borrowing - those tax havens are places of interest to politicians and our govts. in general I think
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