The EU will never close tax loopholes since there will always be a veto from the likes of Ireland, Netherlands, Luxembourgh or UK.

Couldn't any member state just choose to tax daughter companies in their own country, whether or not those daughter companies were buying IP from the mother company in Ireland? Basically choose not to accept transfer pricing as actually reducing the profits in their country, so just tax them anyway. Is this actually against any EU charter? Because my impression was that EU basically does not have jurisdiction over how each country taxes companies within its borders, only that they have to do so uniformly (cf. the fine on Ireland and Apple where they were taxing Apple less than other companies in Ireland). As far as I can tell, what is needed to fix transfer pricing isn't a change of the tax law in tax havens, it's a change of the tax law in all the other countries that want to stop being exploited by them.

No, not the UK

Uh really? Check any list of the world's tax havens, and you will see the British Virgin Islands, the Cayman Islands, the Isle of Man, and Bermuda. The City of London has been a conduit through which wealth has been pilfered to these territories for a long time. They may shout from the rooftops about others' improprieties, but I seriously doubt their commitment to meaningfully overhaul their own house.

I think it was a comment about the UK no longer being a member of the EU soon (we shall see).

That rumour isn't accurate. The origins of the Brexit campaign are well documented and understood, tax doesn't feature in it. It came out of the rise of UKIP who campaigned primarily on immigration and sovereignty, with the two being intertwined because, immigration was said to be high due to the EU forbidding any controls on intra-EU migration. That rise combined with long term Tory euroscepticism pushed Cameron to promise a referendum to win over UKIP voters, a promise he made good on, and then the Remain campaign lost.

When I looked at this there was a very narrow set of new rules that would need to be introduced into UK law (I found a paper on the EU website, however https://fullfact.org/online/brexit-not-concealing-offshore-a... matches up with my memory).

Primarily the new rules are based on the existing UK rules and I'm guessing whatever legal changes were required are still going through.

Which makes little sense since the country had veto, and now they wont?

Add Malta and Cyprus to that list.

Only for matters considered critical and sensitive for member states - finance, EU membership, harmonisation of legislation etc. it's mostly a hold over from the days of an EEC with 6 or 9 members (ie, right back when UK and Ireland joined in 73), when unanimity worked much better than it can now. Obviously to step back from unanimity requires unanimous vote without use of veto. :)

Most matters are done under qualified majority - which is a small super-majority based on population.

A post-Brexit UK going full on offshore tax haven might encourage the EU to get their act together on finance, and come up with some ways to crack down. Well, one can hope...

The reason the EU's system is so similar is that the circumstances are similar. If you don't require unanimous approval on critical issues then why would smaller countries ever join with Germany, France, Italy, and the UK around?

If you require unanimous agreement how can you ever prevent a bad actor from taking advantage of the system?

By persuading them. It's also much less of a problem that a small country as a bad actor takes advantage of the system compared to big countries abusing smaller ones.

Will Ireland vote against their current income?

He he. The US Articles of Confederation had an European predecessor: https://en.wikipedia.org/wiki/Liberum_veto :-D

While I agree about it making more sense that way, you only need one state to veto such a measure, and further integration is on hold right now. Plus the EU has it's hands full with Syria, Russia\Ukraine and Brexit.

So Spain can act now, or wait a few more decades...

I wouldnt say Syria and Ukraine are anything the EU has their hands full over.

Well, we are indeed quite busy ignoring all those issues very hard!

Does the EU have any unified military? I thought that was fully separate and thus anything related to defense or attack wouldn't really impact the EU?

Most of Google's paying customers are businesses, for them an increase in VAT is neutral as they will be reclaiming it.

In other words, the end customer down the line pays.

The end customer already pays VAT.

But VAT is already collected on internet businesses. I really cannot imagine that it's not collected in this case.

That has already happened to some degree, we just need to expand it and simplify it. Within the EU you have to pay the VAT of the country of the buyer for "digital services". But shouldn't Google and Amazon already be subject to that since they have EU subsidiaries?

You have to pay the VAT when you sell to EU even if you don't have presence in EU. Google pays that. The fuss is about some countries wanting more than that.

The customer pays the VAT. Google collects it and returns it to the government.

It's a moot point who "pays". The tax is added to the transaction which means less profit for the company. I pay VAT. I can sell my product for X. Just because I need to add VAT doesn't mean I can magically sell for X +23% because people wouldn't buy it. The price is set by demand/supply. Paying VAT means the company makes less profit.

I send the VAT money to my government every month. If I didn't have to do that it would be my profit. "The customer pays" rhetoric doesn't hold water. Customers don't care how much of the price is the tax. They make their buying decision based on sticker value.

> If I didn't have to do that it would be my profit.

If your competitors didn’t have to do that either there would be pressure on prices and a new price would be set by demand/supply.

When VAT changes (usually increasing) if doesn’t just affect profits. It also affects prices (to what extent and how rapidly depends on many factors).

Yes, the same way if suddenly raw materials got more expensive. The prices would increase and the companies would make less money as fewer people would be buying. That is assuming the price before the cost increase or VAT was set at a point to maximize profits.

For ads at least, I'm pretty sure Google and Facebook are effectively paying 100% of that. As far as I know, their ad systems work on a bidding process and common wisdom is to bid the average profitability of a new customer * the conversion rate from those that click on your ad. Thus, as long as your bid wins out (you pay the second highest price) you will make money on each ad click.

This represents a case of perfectly elastic demand. No matter how taxes change, the price the advertiser is going to bid never changes and thus all taxes will be off burdened onto google and facebooks margin until obviously the point where the would lose money and then shut it off but that's unlikely to happen.

khan academy article on elasticity and tax revenue: https://www.khanacademy.org/economics-finance-domain/microec...

As a European, I thought so as well. I really can't imagine that they're not collecting VAT.

The parent poster was talking about VAT, which has nothing to do with profits or where the profits are shown.