[newaccount74]

The problem with "sales tax", or "value-added tax" in Europe, is that it applies only to consumers.

Businesses can directly deduct any VAT that they pay from the VAT that they owe. If they pay more VAT than they owe, they can get it back.

This means that Google, Meta, etc., who make almost all of their revenue from B2B transactions, effectively pay no VAT.

The "digital services" tax changes that, by introducing a tax on those revenues.

[victorbjorklund]

"If they pay more VAT than they owe, they can get it back."

Worth noting is that generally means the company has higher costs than revenues (not something you want).

[newaccount74]

Or if you have tax exempt revenue, like B2B sales to other countries.

[victorbjorklund]

That too

[ninalanyon]

> The problem with "sales tax", or "value-added tax" in Europe, is that it applies only to consumers.

That's not quite correct. At each transaction you pay VAT on the margin, that's why it's called Value Added Tax. So if company B buys from company A and sells to company C then company B pays VAT on the difference between what it charges company C and what it paid company A.