GSMA and Euro-telcos argue for exemptions from big tech tax crackdown laws
- Reference: 1629264544
- News link: https://www.theregister.co.uk/2021/08/18/gsma_etmo_oppose_oecd_beps_tax/
- Source link:
An approach to stamping out such avoidance was [1]approved by the G7 group of nations in June 2021, and the 38 members of the Organisation for Economic Co-operation and Development (OECD) and the G20 group have signed up to very similar proposals under the [2]OECD/G20 Inclusive Framework on Base erosion and profit shifting .
But the GSMA – the body that sets standards for and represents the mobile telephony industry – and the European Telecommunications Network Operators' Association say the OECD plans don't consider telcos' special circumstances.
[3]
Neither organisation has a beef with the spirit of the tax-avoidance-avoidance plans, but [4]argue that their members should get special treatment because they already pay lots of tax – including some that other entities do not.
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"Over and above other infrastructure providers, the telecommunications industry pays extensive unilateral Telecommunications Service Taxes (TSTs) in many markets, in addition to corporation income taxes, VAT and spectrum license fees," the organisations' joint post states.
The groups also note that while the OECD plan would remove digital services taxes, it does not propose removing TSTs. Telcos would therefore pay double tax.
[7]G20 finance ministers agree plan to make multinationals pay their 'fair share' of tax
[8]UK government launches new tech watchdog – because the digital sales tax went so well
[9]Big Tech’s Asian lobby says nations shouldn’t go it alone on tech taxes
Another skein of the groups' argument is that the OECD proposals recommend exemptions for some infrastructure services businesses on grounds that, while they may operate in many nations, their profits are tied to the nations in which their infrastructure is located.
The two organisations' statement does not, however, acknowledge that payments such as spectrum fees are not taxes are such, but rather licence fees to access a natural resource. Nor does it mention that all businesses pay value-added taxes.
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The two groups don't argue against all the OECD plans, but instead call for a full tax credit for TSTs and a change in definition of profits to take into account in-country capital investment in physical plant and spectrum, plus borrowing costs, credits and incentives, and accumulated losses to match infrastructure investments with returns.
That call is backed by citing data to the effect that mobile services help to grow economies, making extra taxation of carriers a self-defeating idea as it would reduce their incentive and ability to invest. ®
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[1] https://www.theregister.com/2021/06/06/g7_15_percent_tax_on_big_tech_companies/
[2] https://www.oecd.org/tax/beps/about/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YRzaYYS4iJ2ZVLZAlfBSMgAAANI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.gsma.com/newsroom/blog/gsma-and-etno-call-for-a-more-equitable-and-balanced-approach-towards-taxation-of-the-telecommunications-sector-under-the-new-tax-rules-proposed-by-oecd-g20-august-2021/#_ftn4
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YRzaYYS4iJ2ZVLZAlfBSMgAAANI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YRzaYYS4iJ2ZVLZAlfBSMgAAANI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2021/07/12/g20_global_tax_plan/
[8] https://www.theregister.com/2021/04/07/uk_tech_regulator_launch/
[9] https://www.theregister.com/2020/10/14/asia_internet_coalition_tax_argument/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YRzaYYS4iJ2ZVLZAlfBSMgAAANI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://whitepapers.theregister.com/
In a recent survey...
100% of respondents said other people skills pay more tax.
I'm for it!
Giving [1]tax breaks to [2]telcos always works out well.
[1] https://speedmatters.org/news/new-report-finds-t-mobile-paid-0-taxes-billions-profits
[2] https://bgr.com/general/att-verizon-tax-breaks/
Consumers pay VAT, companies for the most part do not.
Regarding infrastructure costs, they are a normal part of any business and are not taxed, profits are.
Any business that is unable to account for operating costs and build payment for them into its pricing structure will not be viable as a business .
I am fairly sure that the right statistics could demonstrate that toilet paper contributes to economies so perhaps the manufacturers of TP should get special consideration too.
Tax elusion ought to be fought against - period. Not just tax elusion by tech companies, and definitely not just tax elusion by tech-companies-that-are-not-telcos.
"Tax elusion ought to be fought against ..."
Eh?
I'm not sure what you mean by "tax elusion" but if you mean "tax evasion" then that is a criminal offence.
On the other hand what these companies are so fond of is "tax avoidance" which is legal but unethical.
The OECD proposal, which has these people so exercised is designed to put an end to tax avoidance and by the looks of things is not going down to well in certain quarters. Governments should ignore this special pleading and put the measures into effect as quickly as possible. No one likes paying taxes but the benefits of civil society have to be paid for somehow, and unless these companies decide to stop using the roads, schools, police, fire services and so on then they should stop being a parasite and start paying their way.
it would reduce their incentive and ability to invest
yawn.....here they go again, the special pleading of industry financed lobby groups. You're in business. The incentive to invest is that you make money by doing so. The fact that you might make a bit less money than you might have done due to taxation doesn't mean you'll make no extra money, so the incentive is still very much there. And your ability to invest isn't reduced at all because, get this, you don't get taxed on investment, only profits! So you can invest it before the big bad taxman ever gets to see it! It seems so strange to have to explain to these huge businesses how business works, but of course they know really - they just fund the lobbying to try and confuse the public into thinking that it just won't be worth carrying on at all if they have to pay a bit more tax on the profits that will be exiting the business as shareholder dividends.
Excuse me...
.... Your companies don't pay taxes.
Your customers pay your taxes for you. Let me put it another way. If the taxes go up, do you
a) absorb the costs
b) pass them onto your customer.
See, your customer pays, not you.