Is the EU tax based on revenue instead of profit?
Or is basing it on revenue in this instance just supposed to make the "percentage paid" smaller to make FB and Google look worse?
Or is basing it on revenue in this instance just supposed to make the "percentage paid" smaller to make FB and Google look worse?
Profit numbers are very susceptible to accounting gymnastics. EBITDA and revenue, on the other hand, are more difficult to manipulate. If you make assumption that companies in the same domain have similar operations, then profit margin, and by extension taxes paid on reported profits, should be similar. Based on this assumption, one can say that it is worth looking into when companies in the same domain have significantly different reported profit margins or reported profit margins differ significantly based on location. Tax to revenue ratios in this case differing by two orders of magnitude raise some eyebrows.
> "It says that Google pays taxes worth up to 9 percent of its revenues outside the EU"
They're simply asserting that Google currently pays 9% of its revenue in taxes outside of the EU. I don't believe they are calculating their lost tax revenue that way.
To answer your question in the EU corporate tax is yes based on profit. Your revenue minus your expenses.