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Italy Approves 'Google Tax' On Internet Companies

Soulskill posted about 7 months ago | from the all-about-the-benjamins dept.

Google 236

recoiledsnake sends this news from Bloomberg: "Italy's Parliament today passed a new measure on web advertising, the so-called 'Google tax,' which will require Italian companies to purchase their Internet ads from locally registered companies, instead of from units based in havens such as Ireland, Luxembourg and Bermuda. Google, for example, says that it sells nearly all its advertising in Europe from an Irish unit, leaving little taxable profits in the countries where its customers are based. That unit in turn pays royalties to a second Irish subsidiary, which says its headquarters are in Bermuda. Google last year moved nearly $12 billion to the Bermuda unit, the majority of its worldwide income, cutting more than $2 billion off its global income tax bill. Google's Italian unit last year reported total income taxes of just 1.8 million euros, corporate filings show."

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Loophole closed (5, Interesting)

timeOday (582209) | about 7 months ago | (#45779655)

Sounds to me like closing a loophole more than instituting a new tax. I realize that is a matter of interpretation, but the idea that google, apple, etc are "really" in Bermuda etc. is such a hoax in the first place.

Re:Loophole closed (0)

Anonymous Coward | about 7 months ago | (#45779713)

it is not closing loophole it just scratchin on a side of it. As it is law about partiular business domain i.e. advertising. TFA says also that there are lawyers expressing their belief the law can be challange in court and it violates something whatever. It looks like it hurts already???

Re:Loophole closed (1)

schwit1 (797399) | about 7 months ago | (#45779735)

What loophole? Is it only a loophole when you don't agree with it?

Google is serving ads from everywhere.

Maybe a consumption tax on goods and services would be better for the 21st century.

Re:Loophole closed (0)

Anonymous Coward | about 7 months ago | (#45779753)

Yeah, whatever. That goes against European principles, though. Free trade and everything...

Re:Loophole closed (5, Insightful)

currently_awake (1248758) | about 7 months ago | (#45779935)

If people in Italy are paying money for something, then the income comes from Italy and should be taxed in Italy as income. If Italian products are being advertised to Italians, then the service tax on the adds should be paid to the Italian government. We need to very carefully define where things are happening on the internet, there is a lot at stake for the world. Also it should not be legal for companies to put a clause in their EULA selecting a legal jurisdiction of their choice, when neither the customer nor the company are actually doing anything in that jurisdiction.

From Italy, yes, otherwise... (3, Insightful)

SuperKendall (25149) | about 7 months ago | (#45780305)

If Italian products are being advertised to Italians, then the service tax on the adds should be paid to the Italian government.

Why is that so, if all of the equipment the ads are served from is not in Italy?

Are you saying (and you are) that someone in Italy who wanted to advertise on a popular blog hosted in the U.S., should not be able to do so? Or that the blog owner should be required to pay taxes in Italy even though all costs are incurred in the U.S.?

It's not like the person in Italy it not already paying taxes on his internet connection. It's not like they would not pay taxes if they bought something from the ad. It's not like the company who bought the ad is not paying Italy corporate income tax anyway.

It makes no sense that someone operating in a totally different state should have to pay any taxes at all based only on where someone is browsing from, or who buys services from them.

Re:From Italy, yes, otherwise... (1)

saider (177166) | about 7 months ago | (#45780411)

They don't pay taxes where the costs are incurred either. The company buying the ads may also be playing the same game.

Internet megacorps not on level playing field (1)

Anonymous Coward | about 7 months ago | (#45780651)

Your logic would be reasonable if the Internet companies were paying equivalent taxation somewhere on the planet, but they don't, they evade it everywhere.

Almost every other corporate entity pays their dues to society in some place --- even merchant ships flying under flags of convenience pay the national taxes wherever they dock, because they have to be physically in places where they can't evade taxation.

But the Internet giants evade every nation's taxes despite doing business in all of them. It's quite clearly not fair for anyone else.

Re:Loophole closed (1)

Bite The Pillow (3087109) | about 7 months ago | (#45780713)

Only if you don't understand a global economy.

You have taken the stance against a global economy. I'm going to ignore all of the little things, like finding a way to calculate all of the appropriate taxes without adding a cost to the consumers of purchasing a service to do exactly that in each nation, state, county, city, and locale on the planet.

If where things happen is important, we need all kinds of geo-tagging and tracking to ensure people are not cheating on their taxes. Billions of $(currency) are at stake.

You object to tracking internet traffic?

Okay, time for you to put up or shut up. How in the holy shitting fuck of an ass do you want to solve this problem?

The EULA part I agree with, to the extent that ELUA agreement by opening or clicking does not indicate agreement in many places. So piss on that. The other part, more important.

Re:Loophole closed (3, Insightful)

Srin Tuar (147269) | about 7 months ago | (#45780745)

> If Italian products are being advertised to Italians, then the service tax on the adds should be paid to the Italian government

A contemporary, but yet outmoded thought, in my opinion. The internet really shows exactly how old
fashioned this line of thinking is.

What is italy ? The idea that a patch of land and history forms a magical entity which give a small group
of people the right to tax and control the people living therein seems entirely arbitrary to me.
People both within, and without italy, can access servers both within and without of italy's current ground boundaries.
The goods and services and even idle chatter moving over the internet can be in any language, sold in any currency
or other unit of account, or even be given away for free.

Why should the italian government have any special purview over what is bought and sold over the internet ?
Who's to say whether a specific ad targets italians or not, the language ? What if the ad is in english, would it still
be considered to target italians? What is the advertized product is not sold in Euro's, would it still be taxable and
subject to these regulations ?

How about a product, made in china, sold to an italian speaking community living in london, hosted by a server
which physically resides in sweden, and has a .info domain name; how many of these variables
  have to change to make it subject to these new rules?

Re:Loophole closed (4, Insightful)

gl4ss (559668) | about 7 months ago | (#45780289)

look man I'd agree with that ONLY IF GOOGLE DIDN'T HAVE FUCKING SALESMEN WALKING AROUND IN ITALY.

but they do. that's all what the local offices basically do, selling advertisements and finding customers for the ads.

if the sillyness doesn't stop then soon enough I while in europe I won't be buying from my swedish/finnish/german/whatever grocery store even if I go into the store.. they'll just technically make the business of buying happen in Ireland... and the store is just a "showroom" and a "delivery cache".

Re:Loophole closed (4, Insightful)

hjf (703092) | about 7 months ago | (#45780503)

Agreed, as another example:

Google Argentina S.R.L. is an actual company. You can see their data here:

http://www.cuitonline.com/detalle/33709585229/google-argentina-s.r.l.html [cuitonline.com]

Their credit status:

GOOGLE ARGENTINA S.R.L. CITIBANK N.A. 10/13 1 1733,6 N/A -
(means Google took a loan from Citi for ARS 1.73M or USD 300,000)

AFIP (federal tax agency) reports Google Argentina SRL has a few tens of employees.

So. Why should they NOT pay taxes in Argentina, if they are a registered company, with employees, who enjoy the benefits of being a company here (for example, they can take a loan). And they make their profits here and send them abroad completely untaxed.

I hate paying taxes as much as anyone else. But what google does is not fair game. It doesn't allow companies to develop within the country: I'm pretty sure the first ting Larry and Sergei did wasn't exactly to register their company in the Cayman Islands. That was later, when millions already poured in, and creative accountants took over. They are simply exploiting a loophole.

Lots of comments come here from americans, who are very loud about anti taxing, and yes, I fully agree that paying taxes sucks, but you have to understand this: the US prints the world's money. Italy doesn't. All international transactions are made in USD. Italy (and any other non-US country) loses money from their reserves to pay google. Google takes this money offshore. They do the same in the US, but it doesn't matter, as the US simply keeps printing more and more money to compensate (why do you think the USD is so devaluated?). Another thing to notice is that in most of the world, "technicalities", the really nitpicky details you see in police procedural dramas, don't apply. In most of the world, a cop doesn't have to read your rights. And laws are thorough and redundant, leaving little room for argument. And no, lawyers don't have a sexy job of sweet talking a judge. It seems most of you understand that judges rule according to how nicely a lawyer puts his arguments. That's complete bullshit, at least outside the US. A judge won't accept crap like "the suspect crossed the state line as he was firing so technically he fired from another state and his trial is null here".

Making really stupid observations such as "the physical servers aren't in Italy" is incredibly shortsighted. Google is providing a service, and making money. They should pay taxes *LIKE EVERYONE ELSE*. By no means i say google should pay more, or less. I'm simply saying they should. Along with amazon, and any other company that makes not millions, but billions a year and pays ridiculous sums. They get to subvert the system, make a country lose millions every year in both reserves and lost tax money, unemployment from local companies that go broke because of the unfair competition,etc.

This is just the beginning. Most countries will start applying restrictions like this to international companies once the volume becomes big enough. It's not a problem if a few thousand people across the country make purchases. But it is when millions do every day.

Re:Loophole closed (2)

Chris Mattern (191822) | about 7 months ago | (#45779749)

So they're really in Italy?

Ireland and Italy are both part of the EU single market. I don't know enough EU law to say for sure, but this might get struck down by a European court.

Re:Loophole closed (2)

manu0601 (2221348) | about 7 months ago | (#45779969)

Sure this is going to happen.

Then Italy can decide it does not want to obey EU rules, and while I do not think Italy government has the balls to do it, it is technically possible, and it would be quite interesting. Remember EU has not army, and therefore no way to force a member state to obey.

Re:Loophole closed (1)

whoever57 (658626) | about 7 months ago | (#45780157)

Then Italy can decide it does not want to obey EU rules, and while I do not think Italy government has the balls to do it, it is technically possible,

The Italian government has a long history of ignoring EU rules and court decisions. Just google "Lettori EU". However, in this case, the boot is on the other foot. The Italian government would have to use the courts to punish companies that did not follow an Italian law which does not comply with EU free market rules.

Re:Loophole closed (0)

Anonymous Coward | about 7 months ago | (#45780209)

What do you mean with " EU has no army"? France alone has enough nuclear weapons to utterly destroy Italy.

Re:Loophole closed (0)

Anonymous Coward | about 7 months ago | (#45780659)

What do you mean with " EU has no army"? France alone has enough nuclear weapons to utterly destroy Italy.

Yeah, launching nukes in your own back yard. The blow back would be precious. Amazing how daft some people are.

Re:Loophole closed (5, Insightful)

BSAtHome (455370) | about 7 months ago | (#45779759)

The problem, however, is that it may run afoul of European law by discriminating between national and European registered companies. It will depend heavily on the exact wording and application of the law whether the EU will allow it.
The loophole should be closed on EU level, but /that/ is a hard thing to do with all the lobbying going on. Maybe it is time that the tax-systems get better harmonised between EU countries and sanity can be implemented (I know, utopian thoughts, but still).

Re:Loophole closed (0)

Anonymous Coward | about 7 months ago | (#45780647)

Meanwhile, Google surely pays a VAT of 23 percent in Ireland by adding the tax to their service prices in Italy. Italians and Italy gets back part of the taxes from the EU subsidies and other development and support funds. In fact, this law should be renamed as national Berlusconi support tax.

Re:Loophole closed (3, Interesting)

Anonymous Coward | about 7 months ago | (#45779775)

It's going to get thrown out in a year anyway. Both Italy and Ireland are part of the EU, and membership of the EU requires the free movement of capital, people, goods and services between members states. Because the new law prevents Italians from buying a service from other EU member states, it's illegal under treaty - you can guarantee it will be challenged and overturned.

Re:Loophole closed (1)

MightyMartian (840721) | about 7 months ago | (#45779791)

Sounds to me like a violation of EU common market treaties.

Re:Loophole closed (1)

mc6809e (214243) | about 7 months ago | (#45779977)

Sounds to me like closing a loophole more than instituting a new tax. I realize that is a matter of interpretation, but the idea that google, apple, etc are "really" in Bermuda etc. is such a hoax in the first place.

The idea that they're ANY place is a "hoax". If anything, these firms exist only as a collection of habits, customs, and rules -- as abstractions in the minds of the owners and employees. Even as owners and employees change, the firm can continue to exist as the firm's culture is transferred from employee to employee or shareholder to shareholder.

Re:Loophole closed (1)

sumdumass (711423) | about 7 months ago | (#45780315)

They incorporate to save liability so they exist in a particular place insofar as a corporate structure is concerned.

Them living on in the face of change is only a product of that corporation. Not that i support the 3 card monte they are playing for tax considerations. But all they really have to do to get around this is charge all their hardware and administration costs to thei " italy componant" making their tax obligations negligable.

First (-1)

Anonymous Coward | about 7 months ago | (#45779667)

HA! my First!

Surprised this didn't happen sooner (3, Insightful)

haruchai (17472) | about 7 months ago | (#45779669)

Given the global fiscal debacle, I wonder what took so long. Countries simply cannot afford to leave that kind of money on the table when they have massive debt and double-digit unemployment.

Re:Surprised this didn't happen sooner (1)

Anonymous Coward | about 7 months ago | (#45780649)

If you think this is why the debt exists, maybe you're forgetting who incited it in the first place.

Hint: the countries themselves.

Aim at the root cause, not the symptom.

Re:Surprised this didn't happen sooner (0)

Anonymous Coward | about 7 months ago | (#45780749)

Why fix what you broke?

that doesn't seem too unreasonable (5, Insightful)

Trepidity (597) | about 7 months ago | (#45779671)

When Google sells some ads to an Italian company, it is not really a Bermuda company conducting business. Deeming the transactions to take place in the location of the customer isn't the only possible rule you could come up with, but it's a vaguely sensible one, and at least more sensible than the status quo.

Re:that doesn't seem too unreasonable (2, Insightful)

kqs (1038910) | about 7 months ago | (#45780115)

So, local Italian companies advertising in Italy will pay an extra "Google Tax", while other EU and multinational companies advertising in Italy won't. Thus, they're making local companies pay more than foreign companies. This is not likely to produce the results that the Italian government wants.

I'm not sure that this is "more sensible". I don't know how to produce a sensible tax system; it may be that such a system cannot exist. I am convinced that it is impossible to exist under the current US lobbying/donation rules, and I suspect that this is the same in the EU.

Re:that doesn't seem too unreasonable (1)

Bite The Pillow (3087109) | about 7 months ago | (#45780733)

Why is it not really a Bermuda company?

I have been arguing with myself for quite a while over this. Mostly American employees? American founders? American headquarters based in America? Started in America?

What prevents BP, previously known as British Petroleum, from moving their headquarters to America, where a large part of their production and sales actually happens? Are they still British, or are they now American?

What if I make a better beer, and want to move to Ireland? Okay this is impossible, but can I relocate my business to where the demand is?

What if the government shuts down my part of the economy, and I relocate in order to simply stay alive as a company, can I move my base of operations to somewhere where it is not illegal? And as long as the industry itself is able to sell to customers, I'm doing business where the customer is, but just based elsewhere so it is not illegal. Argue semantics if you want, I don't feel like typing more than I have.

How can you allow some movement, but not allow all movement? Do you just "know it when (you) see it"? Is that legal? Is it legal to apply an arbitrary standard so that the legal counsel cannot adequately predict and appropriately advise the business?

The status quo, long story longer, is complicated because business is complicated. Economies are complicated. Deciding what happens where in the global economy is a difficult problem, so who gets to decide?

Good (2, Insightful)

Anonymous Coward | about 7 months ago | (#45779675)

I expect sociopathic behavior out of corporations, who seek to optimize their income in a shallow way (building up the countries they're in will increase income too, but corporate monetary thinking is very short-sighted) and take advantage of any system that they're in. So governments need to pass laws to prevent that kind of behavior.

My only concern is that when the laws get too complex, endless loopholes will be found. They need to have a very streamlined definition of corporate income that doesn't leave much room for the kind of semantic wiggling that Google and others are using in these situations.

Re:Good (1)

JoeyRox (2711699) | about 7 months ago | (#45779747)

Yes, corporations are sociopathic while governments are sane. Be careful which team you root for.

Re:Good (0)

Anonymous Coward | about 7 months ago | (#45779803)

> Be careful which team you root for.

Between corporation and government, I'll root for a (democratic) government every time. They both have power and incentive to do naughty things but at least in theory, government is supposed to work for my good, while corporation for the profit of its shareholders.

Re:Good (2)

JoeyRox (2711699) | about 7 months ago | (#45779841)

I root for the team that provides sustainable wealth creation and jobs.

Re:Good (2)

haruchai (17472) | about 7 months ago | (#45779875)

I root for the team that provides sustainable wealth creation and jobs.

But in which country is the wealth & jobs being created?

Re:Good (2)

JoeyRox (2711699) | about 7 months ago | (#45779931)

The country where the corporations are based, along with whatever country their shareholders live in. Any country can get some of that wealth and job creation for themselves by halting their confiscatory taxation policies.

Re:Good (1)

Anonymous Coward | about 7 months ago | (#45779973)

A corporation makes itself "based" in a country by renting a broom closet with an answering machine and a mail slot that gets checked one a week by a lawyer they've hired to do that and only that. Their *real* head office is somewhere more practical, but their broom office serves just fine for tax purposes. So, yeah, "corporate job creation" pretty much means "more lawyers".

Re:Good (2, Insightful)

JoeyRox (2711699) | about 7 months ago | (#45780011)

As of 2012, Google had 18,500 employees in the USA, with a YoY employment growth rate of 33%. The "broom closet" is reserved for countries that like to confiscate productive wealth and burn it in the most unproductive manner manner possible. If countries want some of that wealth for themselves they can change their tax policies.

Such BS (3, Insightful)

mha (1305) | about 7 months ago | (#45780385)

Are you trying to say Google is the result of low US taxes? That is such a load. Californian taxes are HIGH. If next you come back telling me "but Bermuda..." I'll have to point to what you said and ask how Bermuda tax rates have anything to do with the tax policy of the country the company is in?

Next go and watch this video about the history of the Silicon Valley and go away with your propaganda: http://www.youtube.com/watch?v=ZTC_RxWN_xo [youtube.com]

Re:Such BS (1)

JoeyRox (2711699) | about 7 months ago | (#45780495)

That's an interesting perspective considering America was founded on the back of a tax revolt. The subsequent success of the country was built upon laissez-faire economic policy, a success so great that its momentum alone is still accruing benefits even with the progressive movement toward higher effective taxes/overhead and government involvement. If you want to persuade me otherwise you'll have to look a little deeper into history than just yesterday.

Re:Such BS (1)

the eric conspiracy (20178) | about 7 months ago | (#45780539)

Oh My.

America's chief reason for revolting was to obtain self-determination.

READ THE DECLARATION. Taxes are not mentioned until the 17th grievance.

Re:Such BS (1)

JoeyRox (2711699) | about 7 months ago | (#45780567)

And an entrepreneur's chief reason for starting a business is to contribute to society, right? Man has unlimited capacity for applying eloquent piousness to his most coarse of primal desires. Self-determination? Determination toward what end exactly?

Re:Good (1)

kermidge (2221646) | about 7 months ago | (#45780427)

Two questions: what is capital? Where did it come from?

You use the term "productive wealth" - which I've met before, and have often found it to be a code phrase; then you use "confiscate" as, I'm guessing, a euphemism for tax. So I'm also curious - how would you go about rationalizing the existing way of doing things? I suppose I have a third question, first: what is the purpose of wealth? Or perhaps, what is the proper use of wealth?

(Some clarification, I guess, seeking some common definition. Likely my bad, but I tend to use this long-held definition for starters - a rich person has money; a wealthy person own things whereby people get rich.)

Re:Good (1)

JoeyRox (2711699) | about 7 months ago | (#45780543)

Capital is the retained surplus of value earned from previous economic exchange. I use productive wealth to mean the application of that capital by private industry and citizens of their own free will without interference from centralized power. It's not about government vs private industry but about centralized planning vs a free-market economy. Put the top 1,000 economists in charge of centralized planning and they will be no match for the collective intelligence of an economy whose millions of participants make self-interested, rational decisions that maximize the value they receive and guarantee the most effective use for all factors of production.

I rationalize the existing way of doing things simply because it works.

Re:Good (0)

Anonymous Coward | about 7 months ago | (#45780705)

Because paying the Honey Boo-boo family is more important than repaving roads, fixing up schools, let along paying teachers a decent salary. That is the effect of the free market. You over estimate the intelligence of the masses. You also count on people to be rational, which would make me laugh if i didn't think you were being serious.

You can rationalize all you want, but the system, as is, doesn't work. Or at least, not the way you imagine it does.
If it is as you say, why aren't cocaine, heroin, LSD, methampetamines, etc, capital? Because there is a centralized and concentrated force against the free market, in that area.

How about car insurance? The 'planners' have created rules that interfere with the free market because if you do not have car insurance, you will be penalized by the government because you do not have car insurance. That is not free market.

Actually; I can debunk your entire economic hypothesis in a few words. Pay day loans. Rent-a-Center. Reverse mortgages.

Humans are not inherently rational, or intelligent. I'm surprised you do not comprehend this, considering you should have at least some knowledge of places like 4chan, yahoo answers, and youtube comments.

If you truly do believe that a free market should reign supreme, I only have one question. How much would it cost for me to -purchase- you?

Re:Good (0)

Anonymous Coward | about 7 months ago | (#45780725)

confiscate productive wealth and burn it in the most unproductive manner manner possible.

Does that mean daycare, healthcare and seniorcare?
Or does it mean war and prok barrels?

You should be clearer which side you are trying to troll.

Re:Good (1)

the eric conspiracy (20178) | about 7 months ago | (#45779985)

Job creation doesn't necessarily occur in the country the corporation is located in, or where their shareholders live.

All having low taxation does is cause shell corporations to be set up in your country. Like the ones in Bermuda this article cites. Bermuda may get some wealth that way, but surely minuscule compared to the total economic power of the corporation.

Re:Good (0)

Anonymous Coward | about 7 months ago | (#45780113)

Bermuda gets more out of it than if they didn’t offer themselves as a tax shelter, because companies like Google wouldn’t be there at all otherwise. So it’s a win for them. And it isn’t their problem if other countries lose out.

Now, for a country that has attractions *other* than being a tax shelter, like having a large market that buys things, for such countries it’s not to their advantage to be merely a tax shelter. The country should get things out of offering up their market. So Italy has to balance its taxes against providing its market to outside interests.

This is how the free market works on a global scale. Each country has their sales potentials balanced against taxes. It might not be what libertarians get moist panties over, but it’s the political reality of things.

Re:Good (1)

the eric conspiracy (20178) | about 7 months ago | (#45780413)

The problem is the way tax law is working, companies have become effective at moving their profits from the markets where the actual business is to countries like Bermuda.

Italy is using new laws to capture taxes on the transactions their markets generate.

Given the large debt loads now carried by developed nations I expect this to become popular.

Re:Good (0)

Anonymous Coward | about 7 months ago | (#45779907)

Sooooooooo you're rooting for government? Unrestrained capitalism inevitably leads to ecological disaster and economic instability.

Re:Good (1)

the eric conspiracy (20178) | about 7 months ago | (#45779955)

Right now that appears to be China.

Re:Good (1)

hey! (33014) | about 7 months ago | (#45779957)

Maybe the world has colors in it besides black and white.

Re:Good (1)

cas2000 (148703) | about 7 months ago | (#45780235)

> I root for the team that provides sustainable wealth creation and jobs.

oh, so you're a socialist then? nice to hear.

Re: Good (-1)

Anonymous Coward | about 7 months ago | (#45780397)

How is that NSA thing going? Or drone strikes killing children?

Re:Good (1)

Quasimodem (719423) | about 7 months ago | (#45779819)

I think of them more like they are occasionally competing members on the same team.

Re:Good (0)

Anonymous Coward | about 7 months ago | (#45779947)

My only concern is that when the laws get too complex, endless loopholes will be found.

Loopholes are not really the problem. Many times loopholes are closed when realized - especially when more revenue is needed (Conservative Saint, Regan was famous for it: Tax Reform Act of 1986, for one example.).

The real problem is when big business lobbies for tax breaks at the expense of the little people. Big Oil in the States is a prime example.

states dont want to compete. (1, Interesting)

Arker (91948) | about 7 months ago | (#45779725)

A better solution would be for Italy to simply lower their taxes until it did NOT make business sense to go through such contortions to avoid them anymore.

But states really do not like the idea of having to compete, so I expect them to try crap like this instead. It wont work well, there will be unintended side effects that are harmful, and ultimately little, if any, more taxes will be collected anyway.

Re:states dont want to compete. (5, Insightful)

Great Big Bird (1751616) | about 7 months ago | (#45779761)

Perhaps companies that want to do business in country X end up paying taxes in country X instead of trying to scam their way out of it? Government is not free, and nor is it superfluous.

Re:states dont want to compete. (-1, Troll)

Anonymous Coward | about 7 months ago | (#45779789)

So you agree with big bank bailouts, countless wars, and NSA style spying on everyone.

If goverments stuck to what they SHOULD be doing, there wouldn't be a tax revenue problem, period. As the original guy said, if the state lowered taxes and limited its government, it would be in a better state. Instead they want to prevent business from being done, hurt their GDP, in the name of oppressing their people. Goverments have become immoral.

Re:states dont want to compete. (5, Insightful)

Anonymous Coward | about 7 months ago | (#45779833)

You were so busy stuffing words in that guys mouth I wonder where you got the spare time to build a strawman.

Re:states dont want to compete. (1)

Anonymous Coward | about 7 months ago | (#45779949)

There is at least one other good option: go back to the boom period of the U.S.A., with 90% taxes on income, inheritance, and capital gains above a modest amount and make sure that things like taking out loans against stock in order to avoid the capital gains tax become less desirable (either with specific measures, or the much simpler annual taxing of all personal capital above a certain amount). And, of course, have the IRS tighten the screws on business expenses and perks. The thing is, people who think shell companies are A-OK coincidentally also like playing shell games with where we're supposed to get the funding for the government if we stop trying to get it from one particular source.

Re:states dont want to compete. (1)

sumdumass (711423) | about 7 months ago | (#45780359)

I hope you arent serious. The time frame you are talking about was only possible because Europe had been decimated in a very intense and destructive world war.

Re:states dont want to compete. (1)

phayes (202222) | about 7 months ago | (#45780077)

When the EU pulls their heads out of their asses (as the USA has been urging since Bush41) & does something about uniformization of tax codes between members, THEN, we will have the beginning of a solution to this problem. Italy's "solution" is in direct contradiction with the free movement of goods within the EU that Italy has accepted treaty after treaty, will be contested every step of the way to the European high courts & will be defeated within 2 years.

Re:states dont want to compete. (1)

Anonymous Coward | about 7 months ago | (#45779793)

Governments will corporations into existence and can make them disappear with the stroke of a pen. Governments are not beholden to compete against each other just to be graced with a corporation's presence. It comes down to the fact that if Google does not want to pay its share of upkeep for the Italian state and it's people, it can forgo doing business in Italy and forgo the revenues therefrom.

Re:states dont want to compete. (0)

Anonymous Coward | about 7 months ago | (#45779801)

Right, abolish taxes because corporations are good and government is bad.

Re:states dont want to compete. (2, Insightful)

Anonymous Coward | about 7 months ago | (#45779847)

If taxes were zero, many corps would still look to see who will give them the largest corporate welfare package.

Re:states dont want to compete. (0)

PolygamousRanchKid (1290638) | about 7 months ago | (#45779861)

A better solution would be for Italy to simply lower their taxes

A better solution would be for Italy to simply take a closer look at the shady business and real estate shenanigans of the Vatican. There's lots of profits, legal and illegal, being made there that would drive Jesus to kick over their money changer tables. Jesus would then call for Ballmer to help with the chairs, as well.

Google on "Bishop of Bling" to see what I mean.

Re:states dont want to compete. (1)

lxs (131946) | about 7 months ago | (#45780383)

Damn. I wanted that title.

Re:states dont want to compete. (0)

Anonymous Coward | about 7 months ago | (#45779885)

I'm an American citizen. I go to Europe and do work.
Know who gets my tax money ?
The United States.

seems in light of this I should be getting a bit of a break.

Re:states dont want to compete. (5, Informative)

haruchai (17472) | about 7 months ago | (#45779901)

Except that the corporations haven't chosen to go where taxes are LOW; they've chosen the places where taxes are ZERO.

Re:states dont want to compete. (0)

Anonymous Coward | about 7 months ago | (#45779917)

I think it would be better to create what the article states - a Google tax law. A law specifically for Google which states that Google needs to pay a couple of billions in tax. Just like that and just because they are Google. Maybe a couple of additional such laws would be good. A couple of banks, medical companies and other tech giants may also pay this tax in order to continue doing business.

Re:states dont want to compete. (1)

currently_awake (1248758) | about 7 months ago | (#45779967)

Lowering your taxes means your workers take up the burden and therefore cost more than workers in the third world. The only way you can lower corporate taxes without making your workers more expensive is by eliminating all government spending on things like education, medicare, and infrastructure. And if you do that the corporations won't want to be there because they would have to supply all the infrastructure at their own cost.

Re:states dont want to compete. (5, Insightful)

Tom (822) | about 7 months ago | (#45779979)

A better solution would be for Italy to simply lower their taxes until it did NOT make business sense to go through such contortions to avoid them anymore.

Because the race to the bottom has been demonstrated to be such a great idea in all other areas, yes? Healthcare, social security, heck anything with humans in it.

No, states should not have to compete. When you make business in a country you ought to pay its taxes, period. Tax evasion like this should be illegal, and if Google or anyone else doesn't like it - well, nobody forces them to sell ads in Italy.

Re:states dont want to compete. (1)

Arker (91948) | about 7 months ago | (#45780083)

The race to the bottom sucks. What I am proposing, however, would be a historical reversal of the suckage - a race to the top.

Re:states dont want to compete. (0)

Anonymous Coward | about 7 months ago | (#45780091)

Because the race to the bottom has been demonstrated to be such a great idea in all other areas, yes? Healthcare, social security, heck anything with humans in it.

No, states should not have to compete. When you make business in a country you ought to pay its taxes, period. Tax evasion like this should be illegal, and if Google or anyone else doesn't like it - well, nobody forces them to sell ads in Italy.

Perhaps a little tax competition between governments wouldn't be a bad thing? Competition keeps private companies on their toes, why not government? Monopolies are bad right? I don't think there is anyone out there that would claim their is not room for efficiency gains in government.

Re: states dont want to compete. (0)

Anonymous Coward | about 7 months ago | (#45780231)

This hoary old Cato Institute argument for "tax competition" would also apply to any gov regulation, like child labor laws, gun control, pollution control, and laws against dueling. The result? A race to the bottom; the rich get richer; the only folks stuck with the bill are the "immobile factors of production," the old and the poor. No thanks, "libertarians." What that kind of world has to do with "liberty" is a mystery to me.

Re:states dont want to compete. (2)

citizenr (871508) | about 7 months ago | (#45780311)

A better solution would be for Italy to simply lower their taxes until it did NOT make business sense to go through such contortions to avoid them anymore.

Yes, because tragedy of the commons is the best solution!

Re:states dont want to compete. (1)

Bob9113 (14996) | about 7 months ago | (#45780673)

A better solution would be for Italy to simply lower their taxes until it did NOT make business sense to go through such contortions to avoid them anymore.

The reason corporate taxes make sense, ultimately (in a purely nationalist sense), is to export a portion of your tax base. Take the United States as an example: Suppose a pure US-based company that is publicly traded; all its payroll taxes and all the income taxes of its employees come out of US pockets. The capital gains taxes that we collect are only on US-based stockholders. But the corporate taxes, those come out of all stockholders -- whether they are US-based or abroad. Corporate taxes are the most effective way to export our tax burden.

So that's the nationalist reason to have corporate taxes. The alternative is for domestic taxes to be higher. So if you just hate those nasty taxes, you should be in favor of domestic corporate taxation in whatever country you live -- it's the most effective way to shift your government budget service off-shore.

Not that I fully support that view from a global economist perspective, but you sound like one of those "Taxes are bad!" people; I thought you might want to know how corporate taxes in your nation actually reduce the portion of the total tax bill that you and your fellow citizens have to pay.

IANAL (2)

ebonum (830686) | about 7 months ago | (#45779731)

So what prevents Google for closing their Italian office altogether? Simple tell Italian companies, he is a webpage to buy services and an account in Ireland to pay. If you need help, here is a support number in India or some other location. Somehow I doubt Italy can enforce a rule that says companies can't buy an online service from Ireland.
The nifty thing with the internet is that you can work remotely. Or am I somehow missing the point?

Re:IANAL (0)

Anonymous Coward | about 7 months ago | (#45779827)

you are not missing the point, but you are perhaps misunderstanding why there are "local" offices in the first place. The first reason is language and the second is culture. Go to any "american" chain in Italy and you'll see what I mean. Mickey D's is a good example everywhere you go.

The real issue is that global corporations play the nations off against each other. A system needs to be developed that perhaps looks at gross trade and asset allocation , so that making a lot of cash one place cannot be simply "traded" for an expense somewhere else. perhap a blend of consumption vs gross levy.

I dunno, but we need to come up with something....

Re:IANAL (0)

Anonymous Coward | about 7 months ago | (#45779929)

The solution is simple: Get rid of organizations that exist on forms of income as precarious and nebulous as taxation.

Re:IANAL (1)

currently_awake (1248758) | about 7 months ago | (#45779987)

So what prevents the government of Italy from mandating the removal of all Google adds from web pages in their country? Simply tell Italian companies if they want to advertise, you advertise here or your customers won't see your adds. It's not like people use HTTPS, now is it?

Re:IANAL (0)

Anonymous Coward | about 7 months ago | (#45780059)

It seems that if a company does not accept the terms of a country, there is no reason for the country to enforce that companies rights to both intellectual property or existence.

What is really stopping Italy or any other government from taking google's IP and rolling their own if google does not play along? Hasn't China already done this and is currently reaping the benefits?

Re:IANAL (1)

kqs (1038910) | about 7 months ago | (#45780141)

So you propose that Italian companies cannot run Italian ads on the largest internet ad platform, but that their international competitors CAN run Italian ads there? THAT is what prevents the government of Italy from doing this.

Or are you proposing that Italy can tell a US company what to show to Italy? Or something else? I'm not sure exactly what you propose, but I'm sure that it will not happen for long because local Italian companies will complain bitterly if they are put at a disadvantage compared to their competition.

Re:IANAL (0)

Anonymous Coward | about 7 months ago | (#45779995)

Here was an idea I came across in my morning reading:

http://theunbrokenwindow.com/2013/12/19/being-uninvited-to-both-lefty-righty-and-libertarian-dinner-parties-corporate-income-tax-edition/

It has its own issues to be sure, but why not just deal governments in as partners in lieu of taxation?

Re:IANAL (0)

Anonymous Coward | about 7 months ago | (#45780045)

I meant to reply to the first reply to the parent. Not sure how that got mixed up.

Similar to Amazon dodging sales tax (3, Informative)

the eric conspiracy (20178) | about 7 months ago | (#45779877)

Really this is a global problem, where an entity can set up an extraterritorial operation and avoid taxation.

Amazon does it to avoid sales taxes and so forth in the United States. Google and Apple do it to avoid taxes in particular countries.

Simply these shenanigans will cause states and countries to extend their cooperation across these boundaries. Eventually there will be a national sales tax system, and an international sales tax.

Re:Similar to Amazon dodging sales tax (0)

Anonymous Coward | about 7 months ago | (#45779953)

Maybe the actual problem is establishing an organization's income on something as precarious and nebulous as a "sales tax".

An organization such as Google has to generate its income by, you know, actually doing something that people explicitly find productive.

Re:Similar to Amazon dodging sales tax (0)

Anonymous Coward | about 7 months ago | (#45780227)

Maybe the actual problem is establishing an organization's income on something as precarious and nebulous as a "sales tax".

An organization such as Google has to generate its income by, you know, actually doing something that people explicitly find productive.

Yeah, here's the thing, the government is about serving everybody, not just the select few who can directly pay for the services they need.

You want to propose a system where everything is paid for by the consumer? You better have some big-ass balls on you.

Re:Similar to Amazon dodging sales tax (1)

the eric conspiracy (20178) | about 7 months ago | (#45780271)

Isn't that the recent environment in Somalia?

watch film (-1, Offtopic)

Bebas Merdeka (3469635) | about 7 months ago | (#45779991)

once I figure out where I can watch the film free at last I found a link where I can watch the film for free, please you click http://scriptgratis.info/freemovies/play.php?movie=1170358 [scriptgratis.info] there you can watch the film for free even you can download, thank you for moris already showed me a place where I can watch the film for free

coment (-1, Troll)

Bebas Merdeka (3469635) | about 7 months ago | (#45780039)

once I figure out where I can watch the film free at last I found a link where I can watch the film for free, please you click http://scriptgratis.info/freemovies/play.php?movie=1170358 [scriptgratis.info] there you can watch the film for free even you can download, thank you for moris already showed me a place where I can watch the film for free

Solution (1)

Overzeetop (214511) | about 7 months ago | (#45780061)

Gross receipts tax; money is received in the country/state/locality where it is paid or from where the transaction buyer originates.

Re:Solution (2)

kqs (1038910) | about 7 months ago | (#45780153)

So PepsiCo sets up an Irish office to pay Google for ads worldwide (including in Italy). Local Italian companies are too small to do the same. And Italy is punishing its own companies. Bad solution, I think. I don't know what a good solution is, mind you, but that's not one.

Re:Solution (1)

rtaylor (70602) | about 7 months ago | (#45780295)

A Russian can import goods from China into the United States. They pay duties and other fees at the border of the United States as the goods enter the country; even if they intend to pay Americans to take the product.

The internet needs some kind of enforced border to ensure duties and other fees are paid on content as they arrive. The ads, in this case, would require payment in order to be presented to an Italian client. The "good" is being consumed by an Italian and taxes/fees should be paid when it crosses the border or by the local company regardless of where the purchaser or the manufacturer are located.

A good first step (4, Interesting)

PopeRatzo (965947) | about 7 months ago | (#45780203)

Anything that discourages internet advertising is a step in the right direction.

not sure how to feel (0)

Anonymous Coward | about 7 months ago | (#45780251)

on one hand the vast majority of money the government steals is wasted on corruption and oppression

and on the other hand advertisers are a cancer on humanity so anything that harms them is generally good

I'll give this one a big meh

What about EU freedom of cross-border trade? (4, Insightful)

mike555 (2843511) | about 7 months ago | (#45780481)

Isn't it against European Union laws on freedom of cross-border trade or what's it called properly?

Anti Free-Trade (1)

mysidia (191772) | about 7 months ago | (#45780579)

This kind of law has other negative side effects. An italian company can't buy an ad sponsorship slot on a blog in a different country; because the blogger is not a multi-national entity --- they won't have a company registered in Italy.

The potential advertising options for Italian companies just became very limited......

Re:Anti Free-Trade (0)

Anonymous Coward | about 7 months ago | (#45780677)

Seriously, I make my living selling online. I'm not a huge company, maybe gross 200k in a good year and Italy makes up less than 1% of my business. You want me to jump through hoops to be able to sell in Italy?? Not worth it. You live in Italy? No sale.

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