> Probably the best solution is a minimum tax worldwide.
Wouldn't that make companies pay taxes in countries they are based in (as opposed to where they make money)?
Anyway this could be the push that the EU needed to start their own Silicon Valley.
Wouldn't that make companies pay taxes in countries they are based in (as opposed to where they make money)?
Anyway this could be the push that the EU needed to start their own Silicon Valley.
Given the combined market caps of Apple, Microsoft, and Amazon (~$5.6T) is larger than the national net worth of all but the four largest EU countries, I don’t think there’s a lack of motivation here.
Not sure where you got your info, but I'm afraid it seems inaccurate. The total wealth of the four largest EU nations, as of 2019, are as follows:
Germany: $14.7T
UK: $14.3T
France: $13.7T
Italy: $11.37T
This info is from a Credit Suisse report and is widely cited (https://en.wikipedia.org/wiki/List_of_countries_by_total_wea..., https://www.visualcapitalist.com/all-of-the-worlds-wealth-in..., etc).
By digging a bit into the US data, those numbers are, if anything conservative. According to the US Federal Reserve Bank, in 2014, the US had total assets of $270T and total liabilities of $146T for a net worth of $124T.
So those 4 not included.
No worries, it happens to all of us from time to time :)
As for why… the context is just that EU motivation was being discussed.
(Otherwise I would’ve said something like “Those three companies combined are valued more highly than the entire continent of Africa!”)
If an American SaaS company sells a product hosted in Ireland to a company in Britain, where was that money "made"?
This seems complicated because unlike sales tax, corporate tax is based on profit at the end of the year. It's much more complicated than sales tax. Companies would have to handle corporate tax code for up to 195 countries.
If the company doesn't declare a profit in France, is France going to audit them? They have no presence in France.
Multiply this issue for every country where customers reside. This is bad for consumers. Companies are going to choose which markets are big enough for it to be worth the additional burden. If you're from Canada, too bad; we don't sell to Canadians.
Australia and France have similar tax rates. This doesn't have much effect on how much tax the company pays; just how much goes to France.
We have already have sales tax, which is a much simpler system that taxes revenue, not profit.
Britain. If corporations want to pretend that (for example) China has the authority to restrict what users in China see on foreign websites (cf recent Bing tank man mess, among many others), they can apply the same reasoning to tax liability.
I suppose a company could still move profit wherever they choose, but mostly likely inertia would keep it in place.