Europe being Europe. But more importantly, I find it a but strange the countries with growing deficits thinking that raising taxes is the right move towards improving the economic situation instead of restructuring
> I find it a but strange the countries with growing deficits thinking that raising taxes is the right move towards improving the economic situation instead of restructuring
Speaking of restructuring, how about we restructure the way multinationals pay taxes in Europe?
"Microsoft’s Irish subsidiary posted £220bn profit in single year [..] An Irish subsidiary of Microsoft recorded a profit of $315bn (£222bn) last year [..] The profit generated by Microsoft Round Island One is equal to nearly three-quarters of Ireland’s gross domestic product – even though the company has no employees."
https://www.theguardian.com/world/2021/jun/03/microsoft-iris...
Yeah, the reason that governments are introducing revenue-based taxes is because companies found a lot of loopholes to avoid paying profit-based taxes. This creates an unfair advantage of foreign companies compared to local companies, who have to pay taxes on their profits.
I wonder how they are going to game revenue based taxes?
You do realize there is trade imbalance between EU and US in favor of EU. VW USA BMW USA ASML etc. do exact same thing. IF EU starts changing rules US will mirror those changes an EU will have a net loss. The MS example is about corp structure change and some wiered accounting consequences MS net profit for all of 2020 was 44 billion globally.
If a corporation has operations in a given country including a physical presence and employees and everything, then the profits connected to those operations are absolutely taxable there, regardless of where that entity is incorporated or where its securities are traded or anything like that.
From that perspective, the U.S. operations of a European firm look to the U.S. taxman very similar to the U.S. operations of a U.S. firm, and vice-versa.
The revenues of such operations are usually easy to work out, but the cost-side can be pretty difficult if it's globally distributed and double-taxation treaties are also pretty difficult. This is where transfer pricing and flag of convenience shenanigans come in, allowing these megacorporations to evade the taxman.
It's not like the political will to fix this stuff is not there, but it requires coordinated action from nation-state players, which is not that easy to accomplish.
So, instead, you get these populist governments pandering to their base by going certain things alone in a way that almost certainly backfires economically.
There are always local subsidiaries, so these are generally European companies making the profit and paying no tax. Several of these companies famously exploit jurisdictional loop holes with how they define where the value arises to avoid paying much tax anywhere. While there are rules around how they can do this, they do seem to be broken.
Then maybe the US should change that. Does not change the fact that other countries should be taxing US companies for their local online sales and revenue.
(As a European) I see the party Brothers Of Italy which currently hold power in Italy as a decidedly hard-line right-wing party. And just like pretty much every other right-wing party with a populist bent they promised a lot of tax cuts to get into power.
But then they realised they had to raise taxes _somewhere_ to afford everything else they wanted to do… So instead of doing a mea culpa they instead put forth this stupid law.
True, but as with every canon right wing party, beside being populist they're also strong nationalists, therefore what applies to them does not apply to us, also because local big businesses are the ones keeping those bozos in power.
Speaking of restructuring, how about we restructure the way multinationals pay taxes in Europe?
"Amazon pays no corporation tax in Europe despite €44bn sales" https://www.irishtimes.com/business/economy/amazon-pays-no-c...
"Facebook UK pays £29m corporation tax despite record £3.3bn sales" https://www.theguardian.com/technology/2022/oct/06/facebook-...
"Microsoft’s Irish subsidiary posted £220bn profit in single year [..] An Irish subsidiary of Microsoft recorded a profit of $315bn (£222bn) last year [..] The profit generated by Microsoft Round Island One is equal to nearly three-quarters of Ireland’s gross domestic product – even though the company has no employees." https://www.theguardian.com/world/2021/jun/03/microsoft-iris...