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Comment by divbyzer0 | Hacker News Reader

The EU was strongly against any trade tariffs.

What differentiates this 'tax' from a tariff?

Everybody pays tax. The issue is that some companies avoid paying it in the EU, basically stealing from the EU citizens.

The difference between the taxes and tariffs is that the tariffs target a specific country while the tax is same for everyone (working in a specific industry).

Tech companies seems to be the most notorious tax evaders so this was just a push to make them pay a fair share of tax in the EU.

>> Traditional tax systems have so far failed to capture revenue from companies with global reach but limited physical presence

Correction. You believe everybody pays tax.

> Traditional tax systems have so far failed to capture revenue from companies with global reach but limited physical presence, fueling anger from voters disgruntled after years of austerity and meager wage growth.

I agree that tech companies do not pay their fair share of tax.

But this is an EU tariff against US companies. Will any EU company be affected?

In order to get tax breaks from a country you must be incorporated in that country. So, tautologically, any company that would pay these EU taxes must be an EU company. In the most pedantic sense, this cannot affect US companies.

However US (and other multinational) companies set up subsidiaries and then funnel money through them to get tax breaks thanks to bilateral double-taxation-avoidance agreements. These would be affected, but they've structured themselves this way intentionally so that their profits are collected in a company headquartered in the EU. (Though it should be noted that headquartering EU operations in an EU country is generally a requirement for dealing with EU consumers without tarrifs and so on, but many multinationals funnel their international money through the EU company).

You can't have it both ways. Either you're an EU company which gives you certain tax breaks, or you're a US company that has no tax benefits in the EU for global revenue.

If they are making similar use of tax evasion techniques then, yes [0].

Too many people here act like this is something specifically aimed at US companies, when in reality it's not. US companies just happen to be affected the most by it due to their dominance in this particular business sector.

But this is something that has been long overdue and was bound to happen regardless of who was dominating that sector.

[0] https://ec.europa.eu/taxation_customs/sites/taxation/files/p...

It's aimed at companies incorporated in the EU. If a US company decided to incorporate a subsidiary in the EU to get tax breaks and other benefits, then it makes little sense (to me, at least) to complain about US companies being targeted. Some US companies specifically decided to structure themselves to be EU companies in name (and tax status) -- so from a practical perspective they are EU companies. You can't have it both ways.

(Not to mention this will affect companies like SAP and Spotify, which are real EU companies.)

What makes you think that EU companies are not "affected"? The tax is not on foreign companies thus is not a tariff. It's just a way to make the tax avoidance companies pay some tax.

spotify, SAP, etc?

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