How do you tariff a software service ? Tariffs are applied at import ? Are you paying US software if its hosted in EU datacenter by EU subsidiary ? Or if software licence is sold by EU subsidiary ? The concept makes no sense to me.
If there's a political will and your position is strong enough, a scheme / legal formula is trivial to find.
Even something like "5% of what you make off showing ads to European users" would be enough.
Can add any arbitrary qualifier like "if your main base of operations is outside the EU" - which could hold whether you're a EU subsidiary or not.
A tarrif is a tax. Doesn't have to be on physical products or be applied at the customs office.
>If you start taxing foreign entities different from local you are violating all sorts of treaties and depending on how the laws are written it could be unconstitutional discrimination (once you start talking about foreign ownership etc.)
Nothing that couldn't be overcome. Those treaties didn't exist at one point, and wont exist on another point.
Implementing anti US tax is escalating the tarrif posturing to a full blown trade war.
Do you block your own citizens from accessing sites hosted in foreign countries if those sites/companies don’t comply with your foreign law?
Do you arrest your citizens for accessing those sites anyways or use VPNs to circumvent blocking?
And there are dozens of other questions that raises, but you’re talking about what most people describe as totalitarian states.
Sure happens, including in the EU. There are some european anti-copyright-theft laws for example, and local ISPs are forced to block some warez/pirated ebook etc websites (you can bypass via VPN, but the "official" gateways/DNS block them).
>Do you arrest your citizens for accessing those sites anyways or use VPNs to circumvent blocking?
Not at the moment. And the logistics do not make it very easy (can't track each individual). But you can sure fine any commercial company accessing such sites, prohibit state infrastructure and any company doing work with your state from using them, etc.
I'm not sure what the objection is. Do you mean "does not make sense" from a democratic/open society standpoint (as if european countries are a bastion of that, and such moves are beneath the legislators)? Or that it "does not make sense" from a technical aspect? For the latter, when there's a will, there's a way.
I will note (as an Irish person who's followed this case), that it wasn't about this specific case (and the first deal was in 1991, when Apple was not in a good place) rather it was to demonstrate to multinationals that we'd support them if the EU decided there was an issue.
It was a signalling thing rather than a principles thing.
Also note that Apple last got that deal in 2007, before the iPhone was launched.
VW producing cars in their factories in the USA? Put a tariff on these cars as the parent company is based in Europe.
It’s really not that simple, as e.g. big tech has their development centering the EU as well - so these products are at least partially produced here.
If you want to write some custom rules, sure, but then you’re really opening a pandora box. Technically you could just add 100% tax just on vehicles that have Tesla in their name. Try making such moves and look as investors immediately drop any trust in your countries political system (and currency).
That's expected. The other side already imposes some tarrifs (as did the EU - it's BS that Trump's tarrifs to EU are some unprecedented move, the EU already had tarrifs of US cars and other products).
The problem we're discussing (at least according to a parent comment) is that the US has a lot more "digital services" products than actual physical products where EU tarrifs are currently applied.
So, what's discussed is how to tax those (and how to sidestep "but it's a European subsidiary, not a US company" hurdle).
So, sure the US can counter EU digital services by also using the same sidestepping. But it's not like EU has many such worth talking about. All the big players are from the US (Facebook, Google, Amazon, MS, etc).
Or, going the other way - if you’re an EU company but your software users are outside EU, you don’t need to charge them VAT.
When I was running Appcodes, I didn’t want to ask about the country directly, so I got an official opinion from Polish IRS that if I store geolocated IP address of registration and browser timezone for additional confirmation, it’s a good enough proof to not charge vat to consumers outside EU.