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Comment by mrweasel | Hacker News Reader

That seems like a potentially risky move from YouTube. Won't every other country now demand that they do the same for them?

This is going to be extremely confusing for creators. I can't imagine anyone but the very largest YouTubers being able to handle getting taxed in multiple countries and figure out what exactly they need to pay at home.

Actually, the large YouTubers may be better of simply demonetizing they videos and just sell sponsored videos and embedded ads directly.

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How is abiding to the U.S. law, where Google/YouTube is incorporated a "risky move"? It's not like there is a choice.

https://support.google.com/youtube/thread/101463270?hl=en

I thought that was a strange phrasing as well?

Since when is YouTube more powerful than national governments? People seem to be under some confusion as to how business works. The governments tell YouTube what YouTube has to do to operate in their jurisdiction, and YouTube either does it, or leaves that jurisdiction.

If Togo made the demand, you can leave. If the US or Germany make the demand, you say, "Right away sirs", and you start collecting their taxes.

Then I guess EU should do the same.

Americans on YouTube should pay taxes in EU on EU ad views or YouTube should leave EU.

But I think in practice EU is thinking more in direction of simply taxing global profits of tech giants.

Tax global income of a company not based in EU for doing business in the EU? Is that what you mean?

Yes, EU seems to be looking to establish rules to determine how much profit a company generated in the EU and tax that [0].

> The new rules will also change how profits are allocated to Member States in a way which better reflects how companies can create value online: for example, depending on where the user is based at the time of consumption.

Seems like currently EU is in the process of public consultations on a new digital taxation [1].

I'm not sure how the details changed since the proposal, or where they will go. But EU is certainly moving on it.

[0] https://ec.europa.eu/taxation_customs/business/company-tax/f...

[1] https://ec.europa.eu/info/law/better-regulation/have-your-sa...

Remote workers will be screwed then. I've worked for companies incorporated in Switzerland and I live in Poland, why on earth would that make sense to pay Swiss tax if I live and work in PL?

Also Alphabet is a Delaware incorporated company - tax haven, plus there's the good ol' tax haven of Dublin that FANGs love and Google is located in, like Facebook, Amazon, insert other multi-billion turnover company.

For anyone interested in Ireland's tax loopholes: https://www.irishtimes.com/business/economy/explainer-google...

Many companies are incorporated in Delaware because it has a highly functioning secretary of state and court system. It's not at all a tax haven, having a state corporate tax rate that's around the 6th highest of the 50 states.

This. You incorporate in Delaware not because it's a tax haven, but because they have the most developed corporate law of any state, and the chancellor/vice chancellors on the Delaware Court of Chancery are without a doubt among the best judges on corporate issues that you will find anywhere in the world.

> most developed corporate law of any state

Honestly this just sounds like the old Swiss tax rules of 'we never disclose your details, even to the feds'.

No, it's nothing like that. Businesses like Delaware because they can easily hire lawyers that know Delaware law, and those lawyers can say with a good degree of certainty that the law means X or Y, because many businesses before them have already settled the case law there.

This is not the case for every state. In some states, your specific business legal concern might be something that is not clearly outlined under the text of the law, and there may be a complete lack of case law to guide your lawyer.

TL;DR: lawyers in Delaware are more likely to answer "yes" or "no" rather than "maybe" to your business law question.

Should google pay tax to Poland for ad rev sales made in Poland?

This is no different.

You do know that they are incorporated in Dublin too, right alongside all the tech companies - because it's a tax haven.

https://www.irishtimes.com/business/economy/explainer-google...

Why does this matter? They can be incorporated in Dublin, but the new rules still apply to a Polish youtuber.

Because of the original argument being that it's a US incorporated company when in fact it's an EU incorporated too therefore why would a EU based creator pay US based taxes when clearly Google is functioning and registered in the EU?

My impression is that tax laws don't necessarily make sense. Rather, they embody the attempts of the politicly powerful to shift tax burden onto others.

In your case, the power imbalance would come from Poland (or the EU?) not prioritizing your situation in trade negotiations with Switzerland. And your inability to force the EU to change that.

That's my working theory anyway. Happy to be corrected.

Isn't Google conveniently abiding to Chinese law in China as well? How does your logic work?

Except that Google is an American company.

OP just argued that the reason why Google abides to US law is because it's a US company. Their actions however show they abide to whichever laws are more convenient for them.

That makes sense to me. Which actions show they’re violating any law in any country?

What's the problem with my logic? Google has to abide the law of countries with which it does business.

Abiding laws is not a "convenience", it's something you just do. If you don't you get fined: e.g.: https://www.reuters.com/article/us-france-tech-google-tax-id...

The problem with Google being an American company in this case is that maybe you can pull out of China or Australia if the law becomes too cumbersome, but pulling out of the country you are based in is an order of magnitude harder. I feel that you have interpreted my sentence in the worst possible light, but ok.

Google is a multinational, they have a subsidiary in almost every single country. If they wanted, they could operate the local YouTube creator services under every jurisdiction not to charge this tax, and may very well be forced to.

It might be a surprise to you, but most of us aren't fond of being subjected to foreign laws.

Other gouvernement will take notice.

In the same TOS change Google added a point where they say that they can show their own ads on demonetised videos https://support.google.com/youtube/answer/10090902?hl=en

Well, they are hosting and streaming and re-encoding them for free

You really think they do this for altruistic reasons?

No, but it's weird when people get annoyed that Google are putting ads next to the videos

Probably not. The US is one of few (two?) countries with tax policies that cross jurisdictions like these, and so far there doesn't seem to be much of a pushback from other nations. Might have something to do with who has more aircraft carriers.

But yeah, YouTubers are going to be confused. And it makes me wonder, what's next? What about ad revenue from Google / Facebook? Or is that handled through their offices in Ireland?

> Won't every other country now demand that they do the same for them?

What other countries have major services like YouTube that pay their content creators in the US where they could 'do the same for them'?

I think they meant that Spain can now demand Youtubers to pay tax for money they made from Spanish viewers on Youtube. Etc.

Right - my point was YouTube can just not show the videos to viewers in Spain. The company isn’t based there - it can forget about it if it wants. What would Spain do about it?

Are you suggesting Youtube stop showing their videos outside the US? You're probably not aware that Youtube has far more users internationally. They will get crashed.

It would be a pretty effective deterrent against foreign governments attempting to collect tax revenue on views from within their own jurisdiction.

Not sure that anyone will do so, but I think this is what GP is saying.

At the same time, giving up a market will give another competitor a golden oppurtunity which could come to bite them. And countries could probably somehow force Google to continue operating Youtube there by threatning other Google products.

I kinda doubt it. Youtube's "moat" against competition is the fact that storing, processing, and serving video is insanely expensive. Google can only afford to do it to begin with because they are the world's largest digital advertising company.

It would have to be another player willing to invest a ton upfront, and continue burning ludicrous amounts of capital over many years before they could actually compete

I mean the competitor could also be large company, for example, dailymotion.com could take over from Youtube without any major hassle. And EU would probably love it since dailymotion is local company.

This would be great, could lead to creation of several national level alternatives.

Google has offices and/or servers in almost every country. Spain could simply say "your data moves through our cables, pay up".

Nobody made any money from Spanish viewers... they made money from YouTube.

You are hellbanned btw.

They are making money from Spanish viewers - Spanish YouTube premium and Spanish advert impressions.

YouTube makes money from Spanish YouTube Premium subscribers and Spanish companies buying ad slots. Spanish YouTubers make money from YouTube.

YouTube is operated by Google Ireland Limited, which is not in the US, so your base argument is flawed...

I don't know which Alphabet subsidiary the payments to creators actually come from, but YouTube itself is headquartered in San Bruno, California; not Ireland.

I believe the HQ location has no bearing on the entity you're doing business with. The one in the YT terms & conditions as of now is Google Ireland.

That's not a bad thing. It's also probably not onerous for a company with the resources of Google to deal with. The technical work is already done to handle the US.

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