Re:Italy Approves ‘Google Tax’ on Internet Companies
by yetanotherphd on Tuesday December 24, 2013 @02:46PM
(#6960828)
There is a difference between a territorial tax system and tariffs.
If properly implemented, territorial tax systems do not create a race to the bottom, because countries compete for the quality of service they can offer to businesses that operate there. In theory, a rich individual could live in a tiny country with no income tax, but the moment they tried to put that money to work, they would have to operate in some other country which imposed territorial taxation.
On the other hand, this law is more like a tariff. It seeks to impose a tax on value created (i.e. the selling of an ad to an Italian business) whether or not that value was created in Italy or not.
If properly implemented, territorial tax systems do not create a race to the bottom, because countries compete for the quality of service they can offer to businesses that operate there. In theory, a rich individual could live in a tiny country with no income tax, but the moment they tried to put that money to work, they would have to operate in some other country which imposed territorial taxation.
On the other hand, this law is more like a tariff. It seeks to impose a tax on value created (i.e. the selling of an ad to an Italian business) whether or not that value was created in Italy or not.