Obama Rejects Tax on Personal Data Collection.

( US President Obama Image: Headlinedigest)

Absolutely NOT!

Is America’s emphatic response to French proposals tabled this week ahead of the G20 finance ministers meeting for a new tax on internet multinationals like Apple, Google and Amazon, based on the volume of personal data collected.

France’s quarrel with the U.S is that according to existing international tax rules these companies have no taxable presence in the countries where they source most of their customers through the collection of their personal data.

(Pierre Moscovici French finance minister Image: Reuters)

The French are pushing for the adoption of radical changes to these rules. Principally those related to the existence of a taxable presence of a company in the territory of another so that these digital companies can be caught by the tax dragnet. 

Protective of their multinationals, the U.S is only in favour of ‘tweaks’ to the global regime but not proposals for wholesale overhaul expected to be presented by the OECD in its report to the G20 meeting this Thursday. A draft of this ‘leaked’ document which has been in wide circulation for more than a week details a number of anti-tax haven measures and other initiatives designed to thwart tax evasion, base erosion and other corporate devices to shift their profits away from the countries where their sell goods and services, or source their customers.

(Image: Slate)

According to the OECD’s preliminary report to the G20 this in February:

“Nowadays it is possible to be heavily involved in the economic life of another country, for example, by doing business with customers located in that country via the internet, without having a taxable presence therein. In an era where non-resident [corporate] taxpayers can derive substantial profits from transactions with customers located in another country, questions are being raised as to whether the current rules ensure a fair allocation of taxing rights on business profits, especially where the profits from such transactions go untaxed anywhere.”

Despite its stated resolve to pursue avenues to further combat tax evasion at the end of the last G8 Summit, the US has made it clear that its commitment does not extend to its home-grown internet giants.

Obama might feel differently when non-US rivals for the personal data of its own citizens arise, but until then the U.S seems content to maintain the ‘status quo‘; casting serious doubts on the G20’s acceptance of anything other than a watered-down version of the OECD’s proposal for reform.

[For more on the tax avoidance/tax evasion debate click here.]

[Missed yesterday blog post? Its here.]

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3 thoughts on “Obama Rejects Tax on Personal Data Collection.

  1. Obama is not going to step on the toes of his corporate over lords too much you know. I knew this current push for “tax cheats” was going to end up finding some way that these huge multinational corporations would not be caught in the same vice as the minnows. Oh sure there is going to be some tid bit the Americans can wave around to say they have fought tax evasion. That tidbit is going to be us. They’ll neglect to mention that most of what they collect are fines and fees and not taxes. They’ll neglect to mention that most of the people they “went after” were not “rich over seas tax cheats” I know this because every single article they have written already has painted the issue this way. So that will just continue without any full disclosure.

    Countries like France and Canada are NOT Interested in these measures in the same way the U.S. is! They want corporations to stop manipulating the system but, the U.S. wants to fine and fee and chase everyone and their foreign family and maybe their pets who may have any connection to the U.S. It’s going to be very hard for France or any other nation to get anything from the U.S. on these measures. Impossible nearly.

    They’ll get by with their hoop jumping for the corporations for now but, I do think the truth about what measures like FATCA did and who it harmed will come out. Not until after Obama is out of office, of course. But it will come out for sure. It’s not going to look very good when these huge corporations are carrying on business as usual, the renouncing rates go up and up and nobody wants to do business with average Americans. Some on the left are going to have a lot of egg on their face for going along with something that truly harmed the low and middle class. You hear that unions? Nobody has told them the truth about this but, they did have a responsibility to find out the facts before rubber stamping.

    At any rate the discussion about taxing data collection shouldn’t be about that at all! It should be about how to curtail such collection. We’re into some dangerous territory with all of this data mining, add FATCA in to that and there’s no way in the future anyone will be able to protest or maybe even publicly disagree with the most powerful nation on earth.

    “Absolutely NOT!” That is what these nations should have told the U.S. about FATCA. Now they are all down the rabbit hole. They are believing the U.S. is going to give them something of worth for all the money and time they are spending on this. They are duped completely. The U.S. is not going to do what it is asking of others. The sooner these leaders wake up to that fact and realize how badly had they are the sooner this issue as it is now can die.

    Like

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