Completely disingenuous representation. ALL of EU has Value Added Taxation, that takes money from every transaction to/from corps. For instance, buying ads on Google would automatically incur these taxes.
What EU really wants is double/triple taxation where:
1. They tax your transactions as VAT
2. Income post these taxes are counted as revenues, and costs (excluding VAT) are deducted to calculate profits.
3. Profits from #2 are further subject to corp. income taxes.
This article would be half genuine if they listed the VAT dollar amounts Google has raised for the EU
First of all, VAT is collected by the vendor. But the entity actually taxed is the customer. That's why VAT is an explicit line item on any bill.
Second, almost all customers of Google Ads are businesses, with the resultant right get refunds for any VAT paid.
Third, because of [second], most customers likely take a shortcut: if you add your VAT registration number to your account, Google does not even charge VAT.
VAT is collected by the government. Just because VAT appears as a line item on a bill, doesn't mean the vendor gets to book that as revenues.
> Second, almost all customers of Google Ads are businesses, with the resultant right get refunds for any VAT paid.
You mean, the business itself might charge a VAT from it's customer, and deduct the VAT it pays to vendors as "cost" during taxation. There are NO REFUNDS of VAT from the government!!
> if you add your VAT registration number to your account, Google does not even charge VAT.
Doesn't mean the transaction has 0% VAT fee, the EU/government GETS it's VAT on valid transactions, one way or another. If you somehow avoid VAT reaching the government, you're violating the law! AND, Google is NOT the beneficiary of VAT, regulation typically requires a seller to charge VAT and pass it on to the government.
Let's talk VAT numbers the EU gets from Google (as both a seller, buyer), and income taxes paid by GOOG employees before demonizing them
VAT isn't refunded, but since Google's clients are typically directly deducting the VAT paid from their corporation tax bill and not many people buy ads for personal use, the net benefit of VAT paid on Google Ads to governments is pretty minimal.
The case for income taxes paid by Google employees is better, but then most of them would also be paying high income tax if working for businesses that didn't use elaborate schemes to repatriate their profits.
Unless actual numbers are cited, discounting government's VAT income from Google's operations is not useful. We need a number to understand whether or not Google's contribution to the coffers are actually lesser than the fines it pays.
Unless actual numbers are cited, it is not useful to credit Google with paying taxes which (i) are actually paid by Google's customers if at all and (ii) are generally directly deducted from those customers' own tax obligations and thus generally net to zero.
What in my statement implies Google directly pays VAT taxes. I make it amply clear that "discounting government's VAT income from Google's operations", i.e. owing to the actual operations that result in transactions with Google, under EU law, subject to EU VAT, regardless of who pays it!
On (ii), ANY and all costs incurred in operating a company, including paying VAT, can be deducted from revenues while calculating profit. That in NO WAY takes away from the actual VAT being paid to the government!!! HOW exactly does that "generally net to zero."? It certainly reduces profits, but unlike other "costs" that reduce profit calculation, VAT cannot be viewed as tax avoidance, if anything, the resultant profits post VAT are still subject to corp income tax, constituting double taxation. No CPA will advise a company to pay more VAT as a tax avoidance strategy, so I'm still trying to understand why booking VAT payments under "costs" net to 0, and for whom?
The entire premise of VAT is to guarantee a certain income for the government, as a % on EVERY transaction that happens in the economy. Hence, the mere existence and operations of Google in the EU resulting in transactions, is a source of VAT income for the government. Google can always move ALL incorporation out of the EU, and buyers can make "American" transactions to an American company that completely circumvent EU VAT. By choosing to have an EU entity subject to EU VAT, Google is contributing to EU coffers.
Unless there is an agenda to malign Google, ignoring government income from Google's operations seem convenient, and click-bait-ey.
Your claim that it is "completely disingenuous" and click-bait-ey to note Google avoids so much corporation tax on its European operations it actually pays more in fines rests on a completely disingenuous claim that VAT on Adwords should be counted as "dollar amounts Google has raised for the EU", despite them generally resulting in zero net change to company tax bills as they're fully tax-deductible for VAT-registered businesses.
It's a bit rich to accuse others of having an agenda to malign an organization when you started off with claims about what the EU wanted based entirely on your own ignorance of how VAT on business expenses actually works. (It's actually a rare example of a tax designed to avoid "double taxation")
Ah! If VAT is not a tax, and Google's operations inside the EU doesn't contribute to EU coffers, you must be all for moving Google's EU subsidiaries offshore, and saving whatever VAT Google's customers pay?
Google recorder $40B in EU revenues in 2017. About 20%, or $8B was the VAT related revenues that EU received. Let's move all that away from the EU, since it's all one big non-tax.
Also, let's abolish VAT, as my "ignorance of how VAT on business expenses actually works" is being exploited by big-evil Google for tax avoidance. Everyone knows that paying VAT is the #1 way to reduce tax liabilities, translated, "let's all pay taxes on transactions, as a way to avoid taxes on income! Hurrahs all around for the genius CPAs".
VAT is an evil tax on revenues (transactions), that sellers conveniently pass on to the buyer. Whether you agree or not, every seller is also a buyer, and VAT merely increases the cost of doing business, while also effectively acting as a double-taxation ploy, as profits are subject to income taxes. Who ends up footing the VAT bill is immaterial, as VAT goes under "costs" that were previously $0, unless you're a company that buys nothing to sell something. And whether it's booked as "costs" or not, it's a tax that the government receives on transactions under it's jurisdiction. Buying ads from a US company as a US transaction doesn't incur a VAT cost on an EU company, hence, Google's EU presence is a net positive for EU coffers!
I suspect that Google ceasing to do business in the EU would be considerably more harmful to Google's revenues than to the EU (actually that whole argument works better the other way round. If Google is truly struggling to make any profit at all on all that investment they make in the UK, why don't they just leave?)
Please do yourself a favour and educate yourself on what VAT is before you Dunning-Krugersplain what the EU wants from it, how much you think it is worth to the economy and what you think an accountant would recommend a business does (I can recommend a good search engine as a starting point!). The entire point of VAT that it's a tax on the consumer of the final product only, and that businesses get to deduct all the VAT levied on intermediate goods they've purchased to make and market the final product. That's literally the most basic, definitional aspect of VAT that sets it apart from traditional sales taxes. Since Google Ads are bought almost exclusively by businesses, EU member states (the EU doesn't actually levy VAT itself) receive a net tax benefit from VAT paid on Google Ads only on ads bought for personal enjoyment or by VAT exempt organizations, which must be a tiny proportion of their sales. Now there's an argument that Google's customers' customers would buy fewer taxed goods and services if they didn't see the ads, but that's a very different argument and certainly not something you could object to journalists not counting as "government income from Google's operations"
What EU really wants is double/triple taxation where:
1. They tax your transactions as VAT
2. Income post these taxes are counted as revenues, and costs (excluding VAT) are deducted to calculate profits.
3. Profits from #2 are further subject to corp. income taxes.
This article would be half genuine if they listed the VAT dollar amounts Google has raised for the EU