How does exploiting tax loopholes have anything to do with the success of news media? Arbitrary fines and taxes are one thing. Forcing Google and Facebook to help the news sets a completely new precedent.

Countries are competing in a market for tax revenue too. If a country wants more tax revenue from a business, they can either close the legal loopholes that allow the business to reduce the amount of tax that they pay or make their tax laws more competitive with those of other countries.

OMG, this is golden. It's a race to the bottom. It ends up completely destroying states and replacing them with corporations.

I like your comment, not sure if you are joking though. A few decades ago when I started reading William Gibson’s cyber punk sci-fi, I often wondered if the corporate run enclaves in his stories would anticipate real events.

Neal Stephenson - "Snow Crash". Even the U.S. Government is reduced to a "franchulate".

If the police are defunded, I'd bet that private security companies would fill the void and we'd be well on our way to "Stephensonion" being the next "Orwellian"!

> Google&friends are not making money and competing "like any other business".

I don't understand this. Can you explain, please?

Have a look at these. If you can afford to pay lawyers to set schemes up like this, then you are at a competitive advantage against businesses which pay regular tax.

https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifti...

https://en.wikipedia.org/wiki/Double_Irish_arrangement

https://en.wikipedia.org/wiki/Dutch_Sandwich

Take the billions of dollars that you've saved from BEPS and use it to subsidize your local products, or run ads attacking the competition, or taking them to court, or hire salespeople, or build new content. Simple.

Several big-enough companies use tax loopholes to avoid paying taxes or lobby the government themselves.

This is not specific to big tech though, it's a single point of failure of having a centralised government that is easily corrupted by rich corporations.

sorry, again, I'm not following you. How does the ineffectiveness of tax regimes mean that Google and friends aren't competing like a normal business?

This reads like sealioning. You really can't see why an entity A that gives 1% in taxes is at an advantage in competing with an entity that gives say 20% in taxes?

but this behaviour (as said above) is not unique to tech. All sufficiently large, sufficiently multinational businesses effectively stop paying the full rate of tax

Situation in Australia is that they pay zero.

look to the law MAKERS, not the law followers.

Right and say BMW, VW etc are not doing the exact same thing? There is trade imbalance between US and say Germany if both sides introduce equivalent measures it will hurt EU more than it hurts US.

BMW and VW are not doing the exact same thing. They pay taxes to the US IRS for their profits made in the US. The argument against Google and Facebook is based on their use of profit-shifting to avoid taxes on European profits.

> They pay taxes to the US IRS for their profits made in the US.

That's plain wrong. Every company only pays income tax in its country of residence. The only difference is that there might be a sales tax for physical goods.

>Every company only pays income tax in its country of residence.

That is not correct. Taxes are payable wherever the profits are made.

It is usually the case that the country where the company is headquartered will have a far greater proportion of profits compared to revenue because a lot of the things that add value happen there, but in the case of large tech companies, this is taken to the extreme, where not just profits, but even revenue itself is shifted from where the business actually happens.

For example, Google reported £1.6bn (US$2.1bn) in revenue and paid £44m ($58m) in corporation taxes (on profits of £231m ($303m) based on a 19% tax rate) in the UK for the 2019-20 financial year, but its actual UK revenue is estimated to be around £5.7b ($7.5b) for the same period.[1]

Whereas car companies have consumers as their customers and have to pay sales tax, AdWords expenditure by businesses is considered a business expense and is not taxed (in the UK). If they played by the same rules, they would have paid around £1.14b ($1.5b; based on 20% VAT) in tax in 2019-20, instead of £44m.

1. https://www.theguardian.com/technology/2020/apr/07/google-uk...

> Taxes are payable wherever the profits are made.

No, with regard to income tax that's simply wrong.

That said, public companies typically have subsidiaries in other countries and these subsidiaries have to pay corporate income tax in their country of residence (but also regardless of where the profits are actually made). This is often used to avoid (or delay) tax payments, especially if the subsidiaries are in low-tax countries.

But if the parent company Apple Inc. sold an iPhone in Germany, they wouldn't have to pay income tax in Germany, just like BMW AG doesn't have to pay income tax in the US.

I thought the foreign car companies in the US avoid a lot of taxes by paying a license fee for the cars back to their home country.

That's wrong. It's also well known, western companys pay no taxes for factorys in 3rd world countrys since ever. Even they produce real things in a country.

We heard that argument so often during the Brexit referendum. It turned out to be rubbish.

Are you seriously comparing size of UK market with the size of US market?

US Sales represent 14.7% of BMW's exports, UK is 9.2%. It is cleary comparable.