>Ignoring for a moment that this rationale can support any tax policy at all (including 100% tax rates)...

Isn't that true for any rationale for tax? I mean, I wasn't talking about tax rates, that's a completely separate discussion...

>This holds for all businesses, not just large tech companies. So why is the tax focused on the latter?

Because other businesses are already effectively taxed by existing laws. Overseas tech giants are targeted because they were legally avoiding existing taxes.

> This holds for all businesses, not just large tech companies. So why is the tax focused on the latter?

Because they are those who could and had the resources (legal and financial teams) to avoid said taxes, until now, and they happily did so (ie billing through Luxembourg or Irish post boxes). Not that I'd condemn it. Countries and laws were just to slow in catching up.

Most other businesses couldn't (and still can't) go around playing with loopholes because they don't have the means to and most of their goods are, well... physical.

> Because they are those who could and had the resources (legal and financial teams) to avoid sales taxes.

Many countries have laws that effectively say that you must follow the spirit of the law. This seems analogous. See GAAR in https://en.m.wikipedia.org/wiki/Tax_avoidance

Because these large tech companies don't pay taxes currently. The current tax laws have a huge loophole in respect to large foreign internet businesses. Now they're trying to close that loophole.

I think it is impossible to sell anything in the EU without VAT, which is a much higher taxation rate than profit (not as percentage, but as money: VAT is 20-25% of the product or service price, profit can be as low as 1-5%. What the likes of Amazon, Google or Facebook are not paying is profit tax, pretending they have no profits. French companies that have no profits also don't pay profit tax.

Before the new VAT rules Amazon had a deal over VAT with Luxembourg, similar to the deal with Ireland on income tax.

http://europa.eu/rapid/press-release_IP-17-3701_en.htm

> Ignoring for a moment that this rationale can support any tax policy at all (including 100% tax rates)... This holds for all businesses, not just large tech companies. So why is the tax focused on the latter?

Other than the reasons the other replies have mentioned, it is also possible that enforcement isn't worth it for the smaller businesses (i.e. if they did apply to everybody they'd just lose money overall trying to get everybody to comply).

Just a reminder - some US states have sales taxes applied to Amazon purchases, even though they weren't charging them before. This is pretty much the same.

You sell a product, you pay a sales tax. Those states simply leveled the field for Amazon to compete on the same level as local retail stores that pay the sales tax, so everyone pays the same. Makes perfect sense.

And iirc Amazon already pays that in the form of VAT.