On Fri, 25 Feb 2011 20:20:06 +0000, Carlos E. R. wrote:
> On 2011-02-25 17:38, Jim Henderson wrote:
>> On Fri, 25 Feb 2011 14:03:07 +0000, Carlos E. R. wrote:
>
>
>> It’s actually not that simple. Suppose you are buying a service that
>> is provided by an American company but hosted by servers in Canada, and
>> being viewed by someone in Germany.
>>
>> That’s a real situation relating to paid online training. US wants its
>> cut, Canada wants its cut, and Germany wants its cut. All three
>> countries have a valid claim to collect taxes on a fee.
>
> Easy: I decree that Germany will not have a cut >:-P
>
> The other two will pay according to their earnings in each country to
> each country, not to the other.
>
> I mean: if the system produces earnings in the US of 100$, pay taxes for
> those 100$ to the US only. If it also produces earnings of 80$ in
> Canada, pay for those 80$ to Canada, and nothing to the US.
>
> Germany gets nothing because they produce nothing.
They provide part of the infrastructure for the delivery of the virtual
widget.
But more importantly, you have to get politicians to agree to that
scheme, and you know how difficult that can be.
>> Another similar situation - a company based in Malaysia has a partner
>> company in the Philippines who provides a service to customers. The
>> location in the Philippines collects money, sends it to the company in
>> Malaysia who then pays the vendor. (That’s also a real situation, and
>> the cost has to include the tax for both countries, AIUI).
>
> Well, that situation happens to many companies without internet in the
> picture.
Yep, but it again shows the complexities of taxation.
>> Now from the customer’s point of view, yes, they would only pay the BBC
>> in your example, but the BBC would be responsible for paying the taxes
>> to the various regulatory bodies involved. If they don’t pay the taxes
>> owed, and they get caught, they get fined more than the taxes.
>
> The taxes should be the same regardless of who buys the movies.
Well, that I don’t disagree on - the customer shouldn’t have to worry
about the behind-the-scenes distribution/division of the payment.
It’s the simplification of the division of payment, though (because of
the taxes), that makes (for example) the BBC decide not to offer their
product outside the UK.
Having just done my US income taxes, I can understand not wanting the
headache.
>> Changing the law isn’t so simple, either, because it’s not just one
>> country’s law that’s involved.
>
> I know. Dump those countries
>
> (I should be a treckie: no countries, just planets )
I’m with you on that, Carlos, absolutely.
Jim
Jim Henderson
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