back to article EU's tech giant tax plan moves forward

A proposed plan to make sure that digital giants like Apple, Google and Facebook pay more in tax within Europe has moved forward with remarkable speed and a paper will be put to European governments at the end of the month. That's according to the European Commission's tax commissioner Pierre Moscovici, who told reporters [ …

  1. Zog_but_not_the_first
    Devil

    No problem..

    Come to Brexit Britain. Corporations before people.

    1. Anonymous Coward
      Anonymous Coward

      Re: No problem..

      It's humane to pay a higher tax, sez Europhile.

      1. De Facto

        Re: Unfairness is the problem, not the human nature

        Europe seems to struggle to understand that their last millenium VAT system is hopelessly broken in digital age where bank transactions are done in minutes, not weeks as in 60ies of the last century. According to EU own funded VAT tax system audit report last year, more than 300 Billion euro are lost in VAT fraud every year. Besides Google and Amazon, there are hundreds of thousands European own sheniagans, small and big, who discovered that one can digitally easily execute a ring of money transfer across 22 countries tax sustems and use weak local tax systems unable to track this digital deal flow in some badly managed or corrupt countries simply to steal this VAT money. In most EU countries VAT is around 20%. International fraudulent VAT rings could be organized and executed in a day or two using quick cross-border digital money transfer methods just sitting in front of your PC. In all of EU countries minimal VAT reporting period to local tax authorities is monthly. That tells everything about Europe's broken VAT tax system main problem. That problem makes them

        desperate to go tax Google's and Amazon profits instead. Can Europe still maintain their archaic VAT tax system invented by French accounting industry lobbists in the middle of the last century when fast electronic international money transfers were exotics? One should also ask how much of stolen VAT money returns back for EU bureacrats and politicians through elections or shoddy lobbing campains trying to save their dying VAT system from digital world realities? That EU VAT system is so broken, that it has pushed many younger EU countries to start quitely replacing EU VAT system in local laws with "reverse VAT" laws, applying this tax in more and more industry sectors. Reverse tax essentially is a turnover tax (similar to sales tax in US) that goes into state treasury from each product and services purchase made by country residents and visitors. Meanwhile Brussels overloards are face-saving with fighting collateral damage to their inceasingly disfunctioning VAT tax system exploited by Google, Facebook, Apple and other clever maverics who love to exploit EU tax laws complexity.

        1. Anonymous Coward
          Anonymous Coward

          Re: Unfairness is the problem, not the human nature

          Yes and than they pay the server farms from Google or Microsoft with very attractive incentive from the state to be located in that state ... (See Wallonia )

          Also It's a big very big admission of failing from the EU market in the WEB-2.0 industries.

          We don't have any player who plays in the same scale as the Americans or even the Chinese.

          No AWS, No Google, No Facebook or LinkedIn etc

          Not even an European message service as Whatsapp or imessage ( yeah yeah Skype but it too has been Americanised )

          If you look at the future it pretty grim ... the next services who uses these AWS, Google etc platform are also USA bases (see Netflix, AIRBNB, UBER even Tinder ... ) I don't want to think how disruptive the pay services will be for the European financial system.

          So the big plan of Brussels is at first to tax this foreign company later the locals so they have money to subsidies local competitors (of course hand picked) Instead to create the condition that EU market can create true competitors who will generate wealth to the EU community ...

          It's 2017 and we still have the socialist reflex.

          1. ardj

            Re: Unfairness is the problem, not the human nature

            @anonymous coward:This is an extremely muddled comment (leaving aside the grammar and spelling). There are a good many EU start-ups, the problem is not the EU but the oligopolistic behaviour of the your beloved AWS et al, who suppress competition - as you indicate with Skype.

            And why are you against taxing foreign companies ?

            This is not up to your usual standarrd

  2. Mark Jan

    EU - making it up as they go along

    If companies such as Apple, Google et al in all good faith and with a duty to their shareholders to take advantage of all legal systems present in the EU to minimise their tax payments, however "unfair" that may seem to the rest of us, then it isn't those companies at fault but the EU. For the EU to subsequently castigate and change the rules of the "single market" is wrong. I wonder how many times they'll repeat voting until Ireland gets their vote "right".

    1. Mark #255

      Re: EU - making it up as they go along

      Well, that's a bit of a non-sequitur. If tax minimisation is immoral, then companies should welcome paying a "fair" share.

      But if tax minimisation is amoral (instead being simply "doing business"), and a company makes no value judgement as to what is "fair" or "unfair", then the EU altering its rules is similarly just "doing business".

      TL;DR you can't complain that it's the EU's fault, then complain when the EU do something about it.

      1. Phil O'Sophical Silver badge

        Re: EU - making it up as they go along

        Politicians, especially EU ones, never seem to understand the KISS principle. Altering the rules to fix the loopholes is one thing, adding new and different rules will just create new and different loopholes for accountants to exploit.

        1. Anonymous Coward
          Anonymous Coward

          Re: EU - making it up as they go along

          Politicians, especially EU ones, never seem to understand the KISS principle.

          Declaration: I'm a Brexiteer. But having had to work with a mix of UK and EU legislation, I'd say that on balance the UK government are worse than the EU for making things wildly, needlessly complicated, and creating unintended outcomes. And they are spectacularly poor at drafting EU directives into domestic law, invariably making the UK version more onerous, more complex, more expensive, and more shit-headed than other EU countries versions. The UK's tax code is now over ten million words - and of course its still got more holes than a good bit of Emmental. The blame for that doesn't sit with Brussels, it sits with the lazy and inept arts graduates staining the seats of Westminster.

          What is required to improve this is a binding law to place a word limit on new statutes of say 2,000 words (and no appendices or supplementaries), and a need for all legislation to not just have the Royal Assent, but also the Crystal Mark of the Campaign for Plain English.

          1. Anonymous Coward
            Anonymous Coward

            Re: EU - making it up as they go along

            No, the state of the tax system in the UK is manufactured by the likes of KPMG, who HMG use to "advise" them on tax "reform" - i.e. to make it more complicated, whilst leaving as many loopholes as possible for their wealthy clients

          2. John Smith 19 Gold badge
            Unhappy

            "UK's tax code is now over ten million words" "The blame for that doesn't sit with Brussels,"

            Quite true.

            "it sits with the lazy and inept arts graduates staining the seats of Westminster."

            Wrong. They will rubber stamp more or less anything.

            let me suggest that the habit of the HMRC to hire senior partners of the "big 5" accountancy firms as "Special Advisors" (or con-sultants as I prefer) who then go back and advise their high-net-worth clients and major companies on the laws they have had a major (but hidden) part in drafting might have something to do with it.

            One very useful tool for all tax matters is to cast the rules as a Decision Table. A rarely taught (but very useful) software development tool.

          3. Phil O'Sophical Silver badge

            Re: EU - making it up as they go along

            on balance the UK government are worse than the EU for making things wildly, needlessly complicated

            True, the UK tends to gold-plate EU directives to make them "better" unlike, say, France which re-interprets them to make them more convenient.

          4. Doctor Syntax Silver badge

            Re: EU - making it up as they go along

            The blame for that doesn't sit with Brussels, it sits with the lazy and inept arts graduates staining the seats of Westminster Whitehall.

            The tax rules get written in the Treasury. You don't think MPs could write 10million words, do you?

            What is required to improve this is a binding law to place a word limit on new statutes of say 2,000 words

            And whilst we're about it, how about a new law specifying that no program should be no longer than 2000 LoC? Of course to do that we might have to drop things like parameter checking but even if we do what could go wrong?

            1. Anonymous Coward
              Anonymous Coward

              Re: EU - making it up as they go along

              And whilst we're about it, how about a new law specifying that no program should be no longer than 2000 LoC? Of course to do that we might have to drop things like parameter checking but even if we do what could go wrong?

              That's not my concern. I've just spent enough time reading shit laws to know that the likelihood of a law being complex, shit and counter-productive is proportional to the square of its length. Due to their nature, computers need a lot of code. People (and judges in particular) can be very good at correctly interpreting the meaning of the law. But many of the loopholes come down to an excess of words that no politician actually reads - like the Companies Act 2006, which at the time a newspaper could not find a single MP even willing to claim they'd scanned it all.

              Hong Kong get by with a widely respected tax code of less than 300 pages. We have something of the order of 20,000 pages of tax law, riddled with pissy loopholes exploited by large corporations and the rich (although if you're a one man band contractor, these loopholes don't apply to you). Now, I didn't say that we needed a tax code of 2000 words, but we do need to stop the Wankers of Westminster (tm) from continuing to rubber stamp huge volumes of shite they haven't read and wouldn't understand.

              1. Charles 9

                Re: EU - making it up as they go along

                "Hong Kong get by with a widely respected tax code of less than 300 pages."

                It ALSO gets by with a tiny area (meaning travel is easy), a relatively small population, and subjugation to China over greater matters. Basically, it's not like they have crazy infrastructure and operating expenses.

                IOW, different horses for different courses. Can you govern and operate a country 50 million people and assorted businesses of all shapes and sizes using a tax code of less than 300 pages?

                1. katrinab Silver badge

                  Re: EU - making it up as they go along

                  If Hong Kong wanted to collect more tax, they could do so by increasing the rate of tax. They don't need to create a load of new tax code do to this, just change some numbers.

          5. Zog_but_not_the_first
            Happy

            Re: EU - making it up as they go along

            @Ledswinger

            Odd thing, the "new politics". I'm a staunch "remainer" but I agree with every word you've written there.

            1. codejunky Silver badge

              Re: EU - making it up as they go along

              @ Zog_but_not_the_first

              I get the feeling staunch remainers and brexiters have a lot in common. The problem seems to be nationalists and xenophobes which again can be in either camp.

    2. DavCrav

      Re: EU - making it up as they go along

      "If companies such as Apple, Google et al in all good faith and with a duty to their shareholders to take advantage of all legal systems present in the EU to minimise their tax payments, however "unfair" that may seem to the rest of us, then it isn't those companies at fault but the EU."

      Just because you used boldface doesn't mean it's actually true. There is no duty for companies to maximise their short-term profit, merely to act in the interests of their shareholders. One might very cogently argue that paying more tax now to avoid being slaughtered with a turnover tax later is definitely in the long-term interests of their shareholders.

      1. Arthur the cat Silver badge

        Re: EU - making it up as they go along

        One might very cogently argue that paying more tax now to avoid being slaughtered with a turnover tax later is definitely in the long-term interests of their shareholders.

        Except that's liable to happen some time after Hell hosts the Winter Olympics. Such a change needs unanimous support from all EU members. All Amazon, Google, et al have to do is go to the Irish and Luxembourg governments and say "Nice revenue stream you've got here squire, be a shame if it got broken" and there's two votes against the reform.

    3. Doctor Syntax Silver badge

      Re: EU - making it up as they go along

      For the EU to subsequently castigate and change the rules of the "single market" is wrong.

      It may be wrong to castigate companies for following the rules but it's not wrong of them to change the rules if they can agree. After all, they're the EU's rules to change as they wish. However, threatening to do so and getting the necessary consensus to do so are two different things.

    4. Mark 65

      Re: EU - making it up as they go along

      If companies such as Apple, Google et al in all good faith and with a duty to their shareholders to take advantage of all legal systems present in the EU to minimise their tax payments, however "unfair" that may seem to the rest of us, then it isn't those companies at fault but the EU.

      Can we just quit with this bullshit now please? Companies have an obligation to act in the best interests of their shareholders. That is the legal obligation. You may argue that tax minimisation meets that obligation whereas I would argue that if aggressive minimisation strategies result in a revenue based tax then that wasn't really in their best interests after all.

  3. Anonymous Coward
    Anonymous Coward

    And in DC the US Treasury is not happy

    so for once, Brussels carry on and tax the hell out of them especially Google and Facebook.

    1. Anonymous Coward
      Anonymous Coward

      Re: And in DC the US Treasury is not happy

      Another libtard who doesn't seem to understand tax tax is paid by the buyer

      1. DavCrav

        Re: And in DC the US Treasury is not happy

        "Another libtard who doesn't seem to understand tax tax is paid by the buyer"

        If only it were true. This is only true in a single-country market with perfect competition. If Google paid more tax, how exactly would that be passed onto the consumer? And if US companies are taxed, how does that affect the EU consumer?

        Answers on a postcard slipped into an economics textbook, please.

        1. Phil O'Sophical Silver badge

          Re: And in DC the US Treasury is not happy

          If Google paid more tax, how exactly would that be passed onto the consumer?

          Google would increase the prices of its advertising, the advertisers would increase the price of their products to cover their extra costs, and the consumers will have to pay higher prices. Where else could the money come from, if you assume that Google doesn't want to take a cut in profits, which is a given.

          1. Doctor Syntax Silver badge

            Re: And in DC the US Treasury is not happy

            " the advertisers would increase the price of their products to cover their extra costs"

            I suppose it would be too much to hope that they'd stop and ask if the advertising is worth the cost. Yes, it would be too much to hope

            1. codejunky Silver badge

              Re: And in DC the US Treasury is not happy

              @ Doctor Syntax

              "I suppose it would be too much to hope that they'd stop and ask if the advertising is worth the cost. Yes, it would be too much to hope"

              Is that a good thing? To make a product too expensive for the many? Google has already been accused of a monopoly position with most people using it to find items from all kinds of providers/retailers big and small. So raise the price removes some of the smaller shops and puts people out of business maybe, and thats good?

              I am actually quite happy for the EU to knacker itself by removing the point of paying in the country hosting the European HQ as long as we aint dumb enough to follow suit. The reason we do this is we want competition to reduce corporate tax because that is how we benefit. Either way this will make the EU look less attractive again which not only reduces the threat of companies leaving but may also give companies consideration to come this way.

              1. strum

                Re: And in DC the US Treasury is not happy

                >Is that a good thing? To make a product too expensive for the many?

                What's the product? You and me - and Google get us (nearasdammit) for free.

                I'd really quite like to be "too expensive" for Google.

                1. codejunky Silver badge

                  Re: And in DC the US Treasury is not happy

                  @ strum

                  "What's the product? You and me - and Google get us (nearasdammit) for free."

                  Actually I was thinking of all the services they offer such as searchability, advertisement and demonstration facilities (e.g. youtube) which are available for small businesses and big. If you gonna boohoo that Google has some data of yours I would suggest not giving it to them. Its your freedom to trade.

                  "That would be the Laffer 'curve' where Prof. Laffer could never identify the optimum point on the 'curve' where his diminishing returns ceased to diminish?"

                  On which form of taxation? Each form having its own dead weight effect on the economy so 'optimal' (a debatable word) is dependent on the type. Also if your hoping for a single point instead of a margin then you cannot be serious. Finally are you seriously disputing the existence of the Laffer curve? I thought that was only a fringe issue.

                  "and hardly anyone ever gets elected by proposing higher taxes"

                  As labour proved. Except they did, and over and over. With the prime method by claiming them over there get taxed but not you. Then they do.

                  "This alt-right assumption that da gummint is out to get you is childish."

                  It was actually the common opinion only a decade ago as drivers were targeted. The tax bands didnt move with inflation, stealth tax's, etc.

                  "Bullshit. In most cases (99.99%), share-holders are nothing more than gamblers; they haven't put any money into businesses."

                  Pensions, ISA's and so on. What do you have against people? Also in what way have they not put money into a business? Stocks and bonds are about putting capital into a business to help it grow and provide higher returns (which should be the desire of us all surely?).

          2. DavCrav

            Re: And in DC the US Treasury is not happy

            "Google would increase the prices of its advertising, the advertisers would increase the price of their products to cover their extra costs, and the consumers will have to pay higher prices. Where else could the money come from, if you assume that Google doesn't want to take a cut in profits, which is a given."

            It might be a given, but Google are still subject to supply and demand.

            To see why your argument can't possibly be right, suppose that the tax rate were 99.9999% of profit. Now Google needs to charge billions per advertisement, and nobody will pay that, so they go bust.

            No you know your argument doesn't work when tested against hypothetical values, you have to decide to what extent your argument works when prsented with more realistic numbers. A rise in their taxes will lead them to put prices up, but their demand isn't perfectly inelastic and so there will be a drop. They will have to eat some of the costs themselves, because they can't all be passed on.

            Meanwhile, consumers benefit from having reduced taxes themselves (or not having increased taxes, which is the same thing) to the value of 100% of the incerased tax take, more than balancing out the resultant inflation.

            TLDR version: this 'taxes are passed onto the consumer' wheeze is bullshit. People pay in the end, absolutely, but shareholders are people too.

            1. codejunky Silver badge

              Re: And in DC the US Treasury is not happy

              @ DavCrav

              "suppose that the tax rate were 99.9999% of profit."

              That would be the Laffer curve and rates above that were trialled in the last century by the USSR. In the great experiment that was (and is in certain places) it was demonstrated that centrally planned economies dont work. While an amount of taxation is required there are different dead weights on the economy depending on how you extract the money.

              "They will have to eat some of the costs themselves, because they can't all be passed on."

              That is possible. But it wont be their payouts that will suffer this it will be their expenses, their costs. That means potentially reducing their investments in innovation or service (i.e. people in reducing jobs or wages).

              "Meanwhile, consumers benefit from having reduced taxes themselves (or not having increased taxes, which is the same thing) to the value of 100% of the incerased tax take, more than balancing out the resultant inflation."

              Really? Government, the consumer of all and more will somehow not crave more tax? Governments could take 100% and would still want more so why tax payers wont get shafted by more tax is uncertain. Plus the loss of revenue that Google creates through the existence of its services to smaller businesses which may rely on it (see newspapers when Google stopped crawling them) and the cost to the people could be vastly more that what is taken from Google. Add Amazon to that and bang to the smaller business.

              "People pay in the end, absolutely, but shareholders are people too."

              Share holders giving their spare money to fund business which employs people and provides the products and services we want. Why on earth would we want to punish them? Maybe the govs should just control their spending a bit?

              1. ardj

                Re: And in DC the US Treasury is not happy

                I@codejunky:

                Any snide reference to the Laffer curve suggests that one does not understand what it is: do read the Wikipedia article on it (which is quite good - and you will be delighted to learn that among those who have studied it, there is fairly broad agreement that a revenue maximizing tax rate might be around 70%, so some way to go yet).

                As for your proposition that governments will continue to take ever more tax, you seem to be living in the fantasy world of barter that you attribute to the former USSR (yes there was some barter; no it was not universal).

                Do you seriously believe that shareholders are punished by having to pay tax ?

                1. codejunky Silver badge

                  Re: And in DC the US Treasury is not happy

                  @ ardj

                  "Any snide reference to the Laffer curve"..."maximizing tax rate might be around 70%"

                  I would suggest you reread my comment. What snide remark did I make about the Laffer curve? I made a solid remark about the Laffer curve for DavCrav's suggestion of 99.9999% (99.9999% > 70%). You may also notice the part in the same paragraph concerning dead weights of taxation too. I do believe (I might be wrong) that 70% is the total taxation extracted from a person which we are fairly close to for some.

                  "As for your proposition that governments will continue to take ever more tax"

                  Examples of the reverse are few. In fact there seems to be a socialist resurgence where people are willing to state the many failed examples 'didnt do it right' or as for Venezuela they praised until it failed and now go quiet. All while not quiet demanding what they think they are demanding.

                  "you seem to be living in the fantasy world of barter that you attribute to the former USSR"

                  I have no idea what you are on about, maybe you have taken something from the comment that wasnt there or maybe you had a really good weekend and are still getting over it (apologies if its the first and my writing wasnt clear enough for you). From my understanding the USSR clamped down hard on private businesses at times in excess of taxing 99.9999%.

                  "Do you seriously believe that shareholders are punished by having to pay tax ?"

                  Actually I acknowledge tax has the effect of a punishment as it traditionally is used to tax sins (tobacco, alcohol, etc) and to take a cut of trade activity occurring under the jurisdiction of the ruler. That second part is generally for infrastructure, but both have the same effect of reducing some economic activity. That is why it works so well as a punishment or 'sin tax' to change peoples behaviour. My comment to DavCrav was to highlight the statement he made about customers being people but so are shareholders and to remove the dividing lines (customer/shareholder) to point out both are people. Which makes sense after poking the flaws in his comment about only affecting one group (a classic division tactic to claim one group will pay but not the other. But often both do).

              2. strum

                Re: And in DC the US Treasury is not happy

                >That would be the Laffer curve

                That would be the Laffer 'curve' where Prof. Laffer could never identify the optimum point on the 'curve' where his diminishing returns ceased to diminish?

                > Government, the consumer of all and more will somehow not crave more tax?

                Er, no. Governments may be insufficiently responsive to their electorates, but they do respond - and hardly anyone ever gets elected by proposing higher taxes. This alt-right assumption that da gummint is out to get you is childish.

                >Share holders giving their spare money to fund business

                Bullshit. In most cases (99.99%), share-holders are nothing more than gamblers; they haven't put any money into businesses.

      2. Anonymous Coward
        Anonymous Coward

        Re: And in DC the US Treasury is not happy

        Why are you cuckservatives so worried about tax? Tax is only about 25% of your wages.

        Capitalists steal 90% of the value you create that you never even see.

        1. Anonymous Coward
          Anonymous Coward

          Re: And in DC the US Treasury is not happy

          Capitalists steal 90% of the value you create that you never even see.

          Back in your box, Jeremy, or I'll cancel your subscription to Morning Star! And with claims like "capitalists stealing 90% of the value", it seems you've been letting Diane Abbott do your maths homework again.

      3. SVV

        Re: And in DC the US Treasury is not happy

        Thank you Mr A.C. for your splendid thesis on taxation. Just a few questions for you. Is taxation a simpler subject than basic punctuation? Your post seems to imply that you have a greater understanding of the former than the latter. Regarding your use of te word "libtard" (a portmanteau derived from "liberal retard" I am led to believe) : is it wise to question someone's level of intelligence by using such an offensive cliche when exhibiting so little yourself? Finally, can you explain how taxes such as income tax and inheritance tax are "paid by the buyer"? I am sure there are many Economics professors awaiting your wisdom.

        I was not tempted to wade into the debate here on this thread until I read this post. With a short incoherent stream of blather and cliched ad hominem trolling it has managed to get more upvotes than down at the moment. Has El Reg finally succumbed to the trolls, after all these years of being relatively free from them?

        1. Phil O'Sophical Silver badge

          Re: And in DC the US Treasury is not happy

          a short incoherent stream of blather and cliched ad hominem trolling

          Hmm, quite.

          Can you clarify what income tax and inheritance tax have to do with the subject under discussion, which is how to modify taxes on corporations so that they find it harder to avoid paying tax on their sales (which, of necessity, go to buyers)?

          (For the avoidance of any doubt, I am not the AC that your ad-hominem remarks were directed to)

        2. maffski

          Re: And in DC the US Treasury is not happy

          Finally, can you explain how taxes such as income tax and inheritance tax are "paid by the buyer"?

          So you have a wage but your employer has no customers? I can't see that lasting long.

          1. Richard 12 Silver badge

            Re: And in DC the US Treasury is not happy

            It isn't a zero sum game.

            The taxes pay for the infrastructure and environment - legal and physical - that makes it possible for my employer to do business.

            Without that infrastructure and environment, the entire IT industry couldn't exist at all, let alone pay my wages.

      4. strum

        Re: And in DC the US Treasury is not happy

        >Another libtard who doesn't seem to understand tax tax is paid by the buyer

        Another Randtard who doesn't understand the role of shareholders.

  4. The Nazz

    Juncker

    It's a bit rich for Juncker to be moaning about low tax receipts throughout the EU.

    Wasn't he involved in, or indeed the architect of, Luxembourgs very low tax rates?

    Genuine question :

    In a short while, will the new country of Catalonia be in the EU?

    1. Phil O'Sophical Silver badge

      Re: Juncker

      In a short while, will the new country of Catalonia be in the EU?

      That presupposes that Spain will let it go, which seems unlikely given that the referendum has been declared illegal. Is either party ready for a second civil war?

      To answer the question, at the time of the Scottish independence referendum the EU bigwigs made it quite clear that if a region seceded from an EU member state it would not automatically become a member in its own right. It can apply, but will have to meet normal entry conditions, including economic convergence criteria. That is likely to take 5+ years at least.

      1. Justthefacts Silver badge

        Re: Juncker

        "The EU" is an umbrella term - it is not an organisation, and has no bigwigs.

        The European Commission is an organisation, which has bigwigs. The European Parliament has representatives from Spain who will have views on Catalonia. It may only vote on matter and options proposed by the Commission.

        The Commission proposes, Parliament disposes. Since the Commission always writes the question, and writes down the official outcome as they see it, their view always prevails.

        Spain simply does not get a say on Catalonia. The Spanish PM may at best request to raise the matter in the EU Parliament, but so what - it would just be powerless room-meat windbagging at each other. Only the Commission has authority to decide where and how the European Army may be used, since that is derogated as an operational matter. If Catalonia became a military matter, the Commission would come to a view and enforce it. The Spanish Army is not going to be able to stand against that - nowadays only UK, France, Germany, and rather surprisingly Greece can (huge airforce and standing army.....)

        You are of course correct that the Commission will tend to consist of individuals whose personal view is unfavourable on separatist movements. But actual policy is always determined by power plays of cliques looking for high office, which can have counter-intuitive (and changeable) outcomes.

        It is Juncker's view against separatist organisations - he is on record for this. But his internal competitors may choose to use the alternate viewpoint as a lever to destroy him.

        Thus it has always been, thus it always will be, in a political system based on patronage.

        1. Anonymous Coward
          Anonymous Coward

          Re: Juncker

          If Catalonia became a military matter, the Commission would come to a view and enforce it. The Spanish Army is not going to be able to stand against that

          Maybe not, but if the commission sanctioned the deployment of EU-sourced troops in Spain I think Spain would find itself with at least one militia, just as in 1936.

    2. Dan 55 Silver badge

      Re: Juncker

      Madrid has just suspended fiscal devolution for Catalonia, is making local mayors sign something saying that they won't allow the vote to take place or inviting them down to the police station to explain why not, and is raiding companies who are printing voting slips and fliers and making ballot boxes so it's basically game over.

    3. John Smith 19 Gold badge
      Unhappy

      "In a short while, will the new country of Catalonia be in the EU?"

      Not a prayer.

      The Spanish were very bothered by the Scottish independence referendum, especially the bit where the SNP wanted to leave the UK but then enter the EU as an independent nation. At the time they called it an internal matter, but I think they made it clear they would not be supporting a Scottish entry request.

      Factoid. I did not know that Madrid /Barcelona football matches are viewed as "Internationals" by both teams. :-( .

  5. Anonymous Coward
    Anonymous Coward

    The Great Tax Wall of EuroComs

    Like North Korea or China, but by way of high taxes.

    The EU has been turning into a 3rd world place for a while, and that trend has been accelerating.

    Sad!

  6. Cynical Observer

    It will be interesting to see the proposals that the EU actually come up with. If this is based on turnover it will be equally important to stipulate how revenue is recognised especially when invoicing may occur in Ireland for a sale that took place in France.

    Someone put the popcorn on please.

  7. J.Smith
    Trollface

    Why should these company bosses accept paying tax? Taxes are for the little people.

    1. Richard Jones 1
      FAIL

      @ J. Smith

      In the unlikely event that you have paid employment do you claim personal allowance when considering your tax bill? Do you claim child allowances? Do you have an ISA or similar tax free savings vehicles? I trust not, since those are all tax loopholes that exercise those practising numpty-nomics

      1. Doctor Syntax Silver badge

        Re: @ J. Smith

        "Do you have an ISA or similar tax free savings vehicles?"

        Including company or personal pensions.

      2. KBeee

        Re: @ J. Smith

        Well, my cash ISA is currently paying an eye-watering 0.001% interest rate.. TAX FREE! (as just about ANY savings account is Tax Free now - except for multi-million ones)

      3. DavCrav

        Re: @ J. Smith

        "Do you have an ISA or similar tax free savings vehicles? I trust not, since those are all tax loopholes that exercise those practising numpty-nomics"

        Oh behave. There is a difference between unintended loopholes and very specific rules designed to encourage something. You know they are different things, stop being silly.

        1. codejunky Silver badge

          Re: @ J. Smith

          @ DavCrav

          "There is a difference between unintended loopholes and very specific rules designed to encourage something. You know they are different things, stop being silly."

          This is the argument of law. Our laws have generally been designed around the idea of telling us what not to do, not the restrictive and oppressive concept of dictating what we can.

  8. Charles 9

    I think the problem behind the problem is that large businesses (be they corporations or whatever), by dint of their sheer value, have an inherent advantage in their ability to influence governments in their favor no matter what the situation previously. It's for this reasons that tax codes, even after simplifications, can't STAY simplified. Either advantageous modifications are added or PO'd constituents demand modifications to deal with edge cases. Transnational corporations muddy the waters even further by pitting sovereign states against each other in a race to the bottom. Probably the next logical step will be like in the Sprawl and Shadowrun where these transnationals decide the best way to maintain their power is to declare themselves sovereign.

  9. Slx

    I would assume this will apply to French and German multinationals and national champions too?

    Will Ireland and the Netherlands be able to apply similar rules to Renault or PSA or Siemens sales locally taxing turnover / revenue?

    Or, is this just a big attack on the Americans?

    Also I assume they'll be fine with the US adopting similar rules for Mercedes, BMW, Siemens, Nokia, L'Oreal, Airbus, all the European banks etc etc ? They really should have their revenue taxed on a US state by state basis.

    I smell a trade war, particularly if Trump gets the idea that this is an EU tax grab on profits that should be being recognised in California or Massachusetts or wherever.

    If you analyse a company like Apple for example, almost all of its value is being added in California in terms of technology and all of its physical production is in China or other locations in the far East. It could be a reasonable argument to describe their entire EU operation as nothing more than a supply chain and suoport service and write it off as "cost of sales" and recognise profit back home in Cupertino.

    If US corporate taxes do drop there's potentially an end of the needs for serious EU or overseas HQs for any of these organisations. It's a virtual world and you can do anything from anywhere. If you've a smooth EU-US trade agreement, why would you need a HQ in Ireland or France for that matter either. You could just do it all from home.

    1. Graham 25

      Indeed. This has always been the problem with people who use Amazon and complain that Amazon doesn't pay much.

      So they sit at home, and go online to a foreign website, owned by a foreign company, and order stuff which is mostly made overseas, which is paid for on a credit card held by a foreign bank most likely, and the goods are shipped from overseas to the customer (via a UK distribution warehouse).

      Squeeze too much and the warehouse shuts down, the people lose their jobs and the Royal Mail/DHL or whomever gets to deliver a parcel from an overseas warehouse. Slight increase in shipping costs to the consumer - massive loss of jobs in the UK.

    2. tiggity Silver badge

      But surely US has relatively hard to avoid sales tax and so (at least some) revenue does get taxed, but not really teh equivalent here (VAT is a joke as too easy to exploit for big companies)

    3. Jellied Eel Silver badge

      "It could be a reasonable argument to describe their entire EU operation as nothing more than a supply chain and suoport service and write it off as "cost of sales" and recognise profit back home in Cupertino."

      Yup, that's pretty much how it works. Except the last part. If the tech titans repatriated profits to Cupertino, then the US would tax them. So US operations stay as cost centres to reduce their tax obligations, the profits are reinvested snapping up other companies.. And due to low interest rates, money gets borrowed to pay dividends & becomes more debt to allocate to international subsidiaries to keep their profits down. Or just get some very expensive fixtures & fittings for iShops, because those are costs.

      But basically lots of money sloshing around the low-tax/no-tax jurisdictions that could be put to work. Politicians want to do that, but can't figure out how to get their mitts on it. Like others have said though, the challenge is with the tax codes that allow artificial transactions to skim profits. Fixing that would require clear ways to value and allocate costs so they're business efficient, not tax efficient.

  10. Anonymous Coward
    Anonymous Coward

    Silly people, they already have the mechanism

    All they need to do is to fine the living cr*p out of US companies for breaking EU privacy laws.

    Every country gets to charge its tithe via fines, no new complicated tax rules need to be invented and everyone is happy. Well, OK, apart from the US companies but frankly, they've been having it too good for years.

    1. Graham 25

      Re: Silly people, they already have the mechanism

      How will you enforce the fines when they simply move offshore and tell people to use the internet as before ?

      1. Anonymous Coward
        Anonymous Coward

        Re: Silly people, they already have the mechanism

        At the point of delivery, perhaps, where physical goods MUST touch sovereign soil and be subject to shipping regulations and whatnot, requiring a payment of taxes upon delivery?

  11. Graham 25

    "European countries are furious that under the current rules, digital companies are only taxed on profits"

    I thought that all companies are taxed on profits, via Corporation Tax.

    What is the EU going to do if Google, Facebook and others go entirely offshore - block the most popular parts of the Internet ?

    1. Anonymous Coward
      Anonymous Coward

      Perhaps REQUIRE a physical presence in order to interact with the EU? Then they can challenge the online portals to see if they're willing to abandon a market of a billion-plus people and plenty of money to go around or they're willing to tick off their investors in order to spite the EU?

      1. Slx

        So put in a few data centres and employ about 5 people

        If Trump drops the corporation tax to significantly low levels, these companies will just go home and serve their customers out of the US.

        Also with CETA, there's very little stopping them from upping sticks from Ireland, the Netherlands or Luxembourg and moving to Vancouver or Toronto and serving Europe from there. From a technical point of view, there's no particularly huge difficulty providing data centres in Europe.

        I've a feeling that this is going to be a case of bite your nose off to spite your face and because the jobs really only crop up non-France and non-Germany, nobody will give a damn anyway.

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