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Comment by Joeri | Hacker News Reader

Le Maire told the JDD that they should expect to be taxed between 2 percent and 6 percent of their revenue. He also added that the final figure will be closer to 2 percent than to 6 percent.

So 2% must then be a significant increase over the current effective tax rate? Or is this just some politicians posturing for votes?

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Depends on the profit margin of the company. 2% revenue tax equals 8% of the profit for a company with 25% margin. For a company with 5% margin, 2% of revenue equals 40% of profit.

This is my biggest problem with a revenue tax. It disproportionately punishes “high volume, low margin” business models over “low volume, high margin”

But one can argue that his biggest problem with a profit tax is that it disproportionately punishes “low volume, high margin” business models over “high volume, low margin”.

Does it? Profit is what determines the value to shareholders (of mature steady companies). 10% profit tax is the same amount for comapnies with the same amount of profit.

I guess the country where the actual profit is booked (i.e. Ireland) will allow these payments to be deducted from the gross profit, before taxing.

But you're right. A business selling airline tickets online from Ireland, running on razor thin margins, will pay a lot of tax. A business selling software licenses at 90% margin will pay very little.

2% of revenue. Whatever low rate they pay in Ireland is based on profits.

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