[Bloomberg] U.S. Proposes Duties on $2.4 Billion of French Goods Over Tech Tax

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To be fair, I think most U.S. presidents would have to retaliate in some way over this. International corporate income tax is about to be overhauled substantially under Pillar II of the OECD international taxation framework. This basically stems from France and Germany (and a bunch of smaller EU countries) being upset that they can’t tax U.S. tech firms more in their jurisdictions. The current policy is that taxation should be aligned with the functions performed, risks carried and assets utilized by an entity of a multi-national group. In the case of U.S. tech firms, they perform almost all functions, carry most of the risk and have most assets developed in the U.S. This fact combined with domiciling the European HQ in Ireland and letting that entity own IP means that the European entities that only perform sales or support functions are remunerated through the transactional net margin method (TNMM) with probably operating margin and/or total cost markup as the profit level indicator, meaning that the local entities are guaranteed an operating margin or cost markup of somewhere around 2-6%. The U.S. is a post-industrialist society in the sense that a lot of companies are tech-based and can therefore expand globally without having to invest significant amounts in capital expenditures. Germany and France on the other hand are still only industrialist societies in this regard whose largest companies are still manufacturers (be it cars, pharmaceuticals, chemicals etc.). We are standing at a great divide and it will be interesting to see how it pans out. But just defaulting to accepting the views held by Germany and France is too simple and doesn’t take into account the current rules and legislation nor the political motivation behind them. Also, the currently leading proposal under Pillar II is that all consumer goods shall be taxed based on revenue. This will included cars and baguettes as well, so it will be interesting to see what the outcome will be.

SEC_INTERN

The language used here is such crap. The difference between a tax and a tariff is essentially zero. The French tariffs on US digital services were met with a tax on French luxuries.

Richandler

Champagne tax – one of the few things Michael Bloomberg has given permission to report on!

QPRCHOC

how you like dem baguettes pierre?

noobie107

Gotta protect our multinationals which pervert and meddle in politics in foreign nations, while supporters of US exceptionalism lies and selfishness right here on this sub think only the US should be able to reign in any foreign corporations. It’s all about having power over others and being “free-market” liars and con men.

whochoosessquirtle