France has approved a digital services tax despite threats of retaliation by US

I never understood the logic behind taxing large internet businesses.<p>The idea behind taxes is that you use some public resource and you pay for that service. You own a home in a neighborhood, you pay property tax that funds the schools. You drive a car, you pay gasoline tax that funds the streets. You hire workers locally, you pay the tax to pay back all the contributions public institutions made to adding the skills to the worker.<p>But the idea that a company like Amazon owes some tax to France doesn&#x27;t make sense. Sure the delivery person uses the roads, but they pay the gasoline tax and the delivery company pays taxes. What public resources did Amazon, a US company, use from France?<p>The other theories of taxation is that it should be used to raise revenue from the best means possible. I disagree with that framework but applying taxes arbitrarily hardly seems fair or the best way to raise revenue.<p>The other argument is that the government should &quot;level the playing field&quot;. But again arbitrarily punishing or helping some corporations opens up the possibility of corruption and corporate meddling as corporations look for favors. Much of the edge Amazon has versus local retailers is that it is more efficient. It doesn&#x27;t take up store space (and pay taxes on the land) and it doesn&#x27;t have to hire a lot of local workers (and pay taxes on their salaries). It&#x27;s simply more efficient and its services are appreciated by the consumers.

The US administration is presenting the new tax as if it was specifically targeted to US companies because of their origin. Like a tariff.<p>It is not the case at all. Yes the biggest tech giants that do not pay enough tax are mostly from the US (also other companies from other countries are affected too)<p>But it is not because they are from the US that this new tax is created. It is simply because they don&#x27;t pay enough tax

Part of me originally wanted the US to retaliate since this theoretically threatens my paycheck, but a 3% tax on revenue generated within the country is pretty low and seems reasonable considering how ineffective taxing profits is due to loopholes.<p>I really don&#x27;t think it&#x27;s sour grapes so much as trying to address the Irish&#x2F;Luxembourgish tax schemes

Taxing digital companies based on digital presence certainly makes sense to me, as a layperson. A company that&#x27;s selling ads to a French company that wants to show those ads to French users is doing business in France, end of story.<p>Taxing only very large corporations - that&#x27;s a little more questionable, but plenty of countries (including the US) treat small businesses preferentially, so it&#x27;s not like it&#x27;s unprecedented.

Interestingly, the only recent French tech company to be even remotely globally relevant (Criteo), is also affected.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;List_of_companies_of_France" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;List_of_companies_of_France</a> is a good list to look at. There is only one other software&#x2F;internet company founded in France since 2000 in the &#x27;Notable&#x27; list - 360Learning. About a third of the list was founded before 1900. A very different list than what you&#x27;d see in the US.

The US has long been using their legal system to skew free market rules and favour their domestic markets and companies.<p>DoJ is constantly &quot;exporting&quot; US law around the world by methods that border blackmail or even sometimes taking hostages.<p>Fighting back has been long due. Though of course France should begin with EU free-riders, Luxembourg and Ireland...

This is a stupid move. The tax is not payed by big tech giants. Not by both, either. It&#x27;s complicated and depends on who needs whom the more.<p>If there are no alternative to AWS, Google Adsense, or an American SaaS in France; the French people will be paying all of the tax. The big tech giants will just slap them with a 3% surcharge for being in France.<p>This is different from US-China tariffs. If the US can source from other suppliers, the Chinese will need to lower their prices. Effectively making them pay the tax. It is a complicated and messy situation.<p>The big tech giants are named that way because they are big and dominant. This makes them able to make the rules and circumvent the current ones. You&#x27;ll need the whole EU (or maybe the EU&#x2F;USA) to get them in line.<p>France has been digging its own graveyard for a while. It seems that they didn&#x27;t learn their lessons and now going full speed. If you are a French startup, you&#x27;ll be less competitive. People hate paying more and it&#x27;s not clear if they can deduct this tax (like VAT).

Good. Next step, have EU countries come up with an estimation of the value of their citizens&#x27; private data that FB and Google gobbles up and tax them on that too.<p>Edit: companies -&gt; countries

Previous discussion: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=20409591" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=20409591</a>

Who is this going to affect? The business:<p>1) between Facebook&#x2F;Google and advertisers based in France?<p>2) between Facebook&#x2F;Google and any advertiser as long as the ads are shown to people in France?<p>3) between Facebook&#x2F;Google and any advertiser as long as the ads are shown to French people?<p>If it is the first, then I don&#x27;t really see a problem. FB and co can either stop doing business directly with French advertisers, or eat the tax, or increase the prices.<p>If any of the others, then how would one go about determining how much money to pay without infringing on people&#x27;s privacy? What would stop FB from either declaring a token amount of &quot;business done in France - as per the options 2 and 3&quot; or even say no business happened? How would the French gov check that? Get the list with all ads shown by FB over a month along with who they showed the ad to so the gov can check if those people where in France or not?

This tax is on sales and not profits, so won&#x27;t it just become another line on the bill for French consumers? I imagine they&#x27;ll just break it separately from VAT.<p>Retroactively they&#x27;ll have to eat the cost though.

What happened to a company who has no physical presence in France refuse to pay the tax on the ground that France has no jurisdiction upon them?<p>Ordering French ISPs to block the web service of that company thereby breaking the fundamental human right of freedom of speech and no censorship.

I&#x27;d guess it&#x27;s even more palatable for France if the US threatens. The combativeness from the US helps foreign leaders to look stronger by creating a nationalist confrontation.<p>Is this tax functionally different from tariff?

There may be a complication : As EU is a single market, US retaliation (except maybe on Champagne and Camembert ...) cannot be targeted on France but on the whole EU. For example, Airbus headquarter is located in the Nederland, and has factories all over Europe. As such, EU will have to enter a fight a single country started. I really wonder what will happen next. Maybe Texas could raise the tax on red sole shoes <a href="https:&#x2F;&#x2F;www.google.com&#x2F;search?q=red+sole+shoes" rel="nofollow">https:&#x2F;&#x2F;www.google.com&#x2F;search?q=red+sole+shoes</a> ?

As much as I support governments cracking down on companies trying to dodge paying taxes, I can&#x27;t help but feel like this is just for show.<p>Since the yellow vests protests started last year(yes, they are still happening, although the number of protesters has been decreasing rapidly), the French government has been under pressure to stop taxing the middle class and go after other entities&#x2F;individuals to raise money.<p>It is no secret that France and most of the developed world is technically broke. With a debt to GDP ratio approaching 100%, the French leaders have to find money quickly or the whole welfare state will come to an end sooner than later.<p>Considering the fact that this tax is supposed to bring in 400m per year, it is basically a drop in the ocean.<p>But, what will happen is that Macron will spin it as a success and will tell people: &quot;See we are taxing the bad guys.&quot;<p>In the meantime, he will keep on increasing the taxes on the middle class covertly.<p>The problem is that in a normal functioning democracy, the proceed of the taxes is used to increase the well being of the population.<p>In France though, all new taxes raised are not used to create or maintain infrastructure or even subsidize basic services for its citizens.<p>Most of the proceeds are actually used to pay off the debt. See the carbon tax from last year when the government admitted that only 50% would be allocated to actually fight climate change and the rest would be used for some other unrelated things.<p>France as a whole has never been more taxed than now, and yet public services and public infrastructure(or whatever is left of it, after they nearly sold everything to private corporations) is falling into disarray.<p>Emergency rooms are closing(They have been on strike for the last 3 months now), social services have been cut back, roads on the countryside are full of potholes, electricity&#x2F;gas prices keep on increasing.<p>The middle class is being bled dry by an overzealous state that does not know what to do anymore to fix the problems it created in the first place.<p>For the last 30 years politicians from all sides of the political spectrum have done one thing and one thing only. Instead of reforming, they just tax, tax and tax more. Until there nothing left.<p>That&#x27;s why France is dying. That&#x27;s why people like me who do not like what France has become have left to create companies&#x2F; pay taxes somewhere where I don&#x27;t feel like I have to share 50% of my money with a state that provides very little to me.

Taxes are never fair, that&#x27;s why you&#x27;ll never agree on them. It&#x27;s a game of coercion and the only thing that can be done is choose who&#x27;s the sucker that&#x27;s gonna pay.<p>Taxing big, multi-national companies is something that I can live with, strangely. I know it&#x27;s wrong, but still less wrong than having poor&#x2F;middle-class directly pay the bill. In the end they have the money to pay tax consultants and the money to deal with it.

I think the Brexit negotiations have probably shown Europe the power of sticking together, and presumably France feels that the rest of the EU has its back here.

I just hope the US does not &quot;retaliate&quot; on this. EU entrepreneurs are too dependent on US businesses.

Very interesting comments that reflects the difference of values between french and north americans!

Absent all this talk about fairness or not, if one were watching CNBC today, Cramer and the other analysts were asking themselves &quot;what exactly is France selling to the U.S&quot; and this is the list they came up with:<p>1. cheese 2. wine 3. ....<p>After a couple minutes on the discussion, they came up with Airbus (not strictly French and made outside of France).

Please do this in the US, and use the money to fund the green new deal.

Amazon should and probably will just raise prices for French shoppers.

Btw, on a tax manner, are these companies really American?

&gt; The French government has argued that such firms headquartered outside the country pay little or no tax.<p>Isn&#x27;t that largely due to EU laws and the decisions of Ireland and a couple other countries.

European regulations and taxes always come up in these threads and some libertarians complain about how it&#x27;s an unfair way to treat a digital company that shouldn&#x27;t pay taxes.<p>Just remember that the United States are subsidizing tech companies (tax amnesties) and all the upside (high salaries, innovation, stock market growth etc...) is going back to the US while the downside of tech companies (electoral manipulation, teen depression, tax avoidance, privacy breaches) is only felt in Europe with no upside.

Aren&#x27;t they already taxed in Ireland, another EU country? Isn&#x27;t this double taxation?

This entire thread shows how much of a waste of time it is discussing taxes or government or social services (socialism!) or markets with Americans. They have such an incredibly skewed point of view based on an insanely unfair and unjust system of everything in the US.

Amusing to read political comments on HN ... It is like discussion about programming laguages, just church wars ....

Trump is right on this one -- this measure is definitely anti-competitive and specifically aimed at American tech companies. I hope he is swift to retaliate with appropriate tariffs. Failing to do so will bring a wave of random EU taxes on American tech companies, which will eventually lead to lower profits and engineer salaries.

Instead of taxing companies because it’s an easy method to steal money, maybe France should focus on enabling their people to create a company like Amazon or Facebook and actually generate wealth instead of taking it?