It is Pierre, it already is

TALLINN (Reuters) – The European Commission will prepare in the coming days a list of legal options on how to make digital multinationals, like Google and Facebook, pay more tax, the commissioner responsible for taxation said on Friday.

“The digital economy should be taxed as the rest of the economy,” Pierre Moscovici told reporters upon his arrival to a meeting of euro zone and EU finance ministers in Tallinn, the Estonian capital, which will discuss the taxation of the digital economy on a session on Saturday.

And introducing a new method of taxing them will mean that they are not taxed like the rest of the economy, won’t it?

21 thoughts on “It is Pierre, it already is”

  1. This sort of thing is right up “Freezerbag” Osborne’s street.

    Thank God the one good thing Mother May did was to flush this particular Chancellor away, otherwise we too would be facing capital allowances on carthorses to keep those pesky tractors at bay.

  2. The only sanction of any significance would be to attempt to exclude those not paying enough tax (as in enough to satisfy the EU and in-country finance ministers), but this would result in little more than good old fashioned protectionism and a trade war focussed upon the digital economy.

    The only solution that Brussels wants to put on the table is harmonisation of corporation taxes (at an appropriately rent seeking level, certainly not the 12.5% available in Ireland)

    I say “Go for it!”. I can’t think of anything more guaranteed to sink the EU than to exclude companies like Amazon and Google. I suspect that post-BRexit Britain would become an obvious beneficiary if we can ensure that Corporation Tax rates are kept low and idiotic attack dogs of HMRC are leashed and muzzled.

  3. To be fair, Amazon’s connivance in allowing third-party sellers to avoid VAT is pretty shocking, and the rules need changing to level the playing field.

    But I can’t for the life of me see how you’d tax Google and Facebook more. I imagine some of the smaller EU countries don’t even have a Facebook office.

  4. Let me guess – the revenues from this tax would go to the EU, not national exchequers?

    How else is the EU going to fund that army to prevent the next round of secessionism?

  5. The Eurotrash are already trying to peddle some kind of tax on Net hyperlinks are they not?

    They must be desperate for cold hard cash.

    The sooner they are all dead the better.

  6. Andrew M,

    “To be fair, Amazon’s connivance in allowing third-party sellers to avoid VAT is pretty shocking, and the rules need changing to level the playing field.”

    Scrap VAT. Ridiculous tax from the era when almost every cake was home baked and socks were darned.

  7. Andrew M

    “To be fair, Amazon’s connivance in allowing third-party sellers to avoid VAT is pretty shocking, and the rules need changing to level the playing field.”

    Assuming not sarcasm, I’m not sure I follow?

    Small retailer (under the limit) subcontracts Amazon as a marketing company / sales outlet and pays them a fee / % per transaction plus say a montlhy admin fee (I presume?).

    A stretch perhaps to portray that they “are” Amazon (or that they sell to Amazon and Amazon sell to me), either legally or beneficially?

    I bought something last week from ABC Trader, not Amazon. ABC Trader were the ones responsible for taking the order, delivering, invoicing and any returns process if anything went wrong, etc? Amazon simply connected me and provided a web face infrastructure that enabled a seamless transaction & payment. Unless I misunderstood?

  8. Geese and plucking feathers. The fact that these companies can operate across the EU from a single location should be a cause for celebration by the EU, no?

  9. PF,
    I bought an expensive electronic item from a third-party seller on Amazon last month, VAT-free. If the seller sold more than a dozen a month, he’d be liable for VAT in this country. Looking at amount of feedback this seller has received over the past few months, and the wide range of expensive goods he sells, he’s clearly selling a lot more than that. Not sure how he’s getting around the VAT rules, but something’s not right. This isn’t a one-off: Amazon is full of such sellers.

    Bloke on M4,

    Sure, scrapping VAT is one option. Just needs sorting out one way or another.

  10. The EU is in a dilemma. Without the UK’s £10bn pa tribute money, it can either cut expenditure – but France will veto any cut to CAP payments and the minnows will veto any cut to structural funds – or increase revenue by EU-wide taxation – which is a can of many worms.

  11. Evidently the EU hasn’t considered to possibility of the USA retaliating. Anyone here ready to bet that Donald Trump wouldn’t think twice about shoving a 2×4 up Jean-Claude Juncker’s ass sideways just for the fun of it?

    Not that Juncker’d be sober enough to feel it, but I assume someone like Angela Merckel would notice his pants weren’t fitting the way they used to.

  12. Andrew M:
    Is there no self-assessment program in the UK? I’m sure HMRC would appreciate your cheque for 20% of the cost of the item in question. 😉
    More seriously, perhaps Amazon should be required to track sales and report sales volumes of their third-party clients, but:
    1) the taxation of those sales (or the collection of tax on them) is strictly between the third-party seller and the buyer – Amazon doesn’t come into it;
    2) it isn’t necessary, as the tax authorities already have all the investigative powers they need to identify sales made by residents, whether through Amazon or otherwise. As always, they just have to follow the money.

  13. It’s all very well to propose scrapping VAT but it does have the benefits of widening the tax base – for example it catches the asset rich and the income poor – in ways that are difficult to avoid, unlike taxes on income, profits and capital. No government that has introduced VAT will ever give it up easily. In the UK for example it is the 3rd largest tax after income tax and NIC. It is about 1.5 times as large as corporation tax.

  14. @Andrew M, September 16, 2017 at 10:55 am

    To be fair, Amazon’s connivance in allowing third-party sellers to avoid VAT is pretty shocking, and the rules need changing to level the playing field.

    HMRC is targetting amazon, ebay, airnb etc sellers not declaring.

    However, their main target is the large-scale vat & import duty evasion by “from” Hong Kong, Taiwan, China etc that are posted in UK. I assume it’s a development from VAT carousel & missing trader evasion.

    Lower VAT and other taxes would reduce incentive for evasion – but that’s too sensible for Gov’t control freaks.

  15. There is no UK self assessment for VAT for purchasers. Only sellers.

    As fair as I am aware, the only times you are due VAT as an purchaser are on import from outside the EU or, if VAT registered, on VAT-free imports from within the EU.

  16. What SE said.
    The purchaser has paid VAT when paying for the item purchased – the seller has collected VAT on behalf of HMRC and is required to account for it to HMRC. If the seller is, or should be, registered for VAT the price he/she/it charges is gross of VAT. That is *not* the purchaser’s problem unless he/she/it has certified to the seller that the transaction is net of VAT for some legally justifiable reason.

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