Facebook, Google is on a Verge to Pay Billions as Taxes across Asia and Latin America
Last updated on December 3rd, 2018
The increasing shift of economic activities online has triggered many companies to exact effort in imposing the new levy tax on big technological websites especially considering changes in taxes across Asia, companies like Amazon Inc. and Facebook to generate the substantial revenue from the technological services the render
The European union agenda to impose taxes on the income of digital companies and not on their profit gain has made countries especial the Asian country like South Korea and seven other countries including India to review these taxes while the northern part of America, which include Mexico, the Latin Americans and Chile are still pondering on new taxes benefits that will surely increase the receipts of other technology companies.
Companies could be at risk if the encounter digital taxes across Asia. This form of taxes has the ability to incur or connect billions of dollars to a company’s present tax amount. These taxes tend to force levies on technical services global companies sell to a specific country outside the country of the transaction. In certain cases, the service may be an estimation of or a proposed tax service that involves collecting data on a local resident.
After the meeting held in EU on November about the tax implementation, France finance minister, Bruno Le Maire made a statement. In his statement, he said, “countries across the planet now understand they must impose a digital tax”. His statement was after that meeting was related to this question, “it is a question of fairness”.
In Europe, some countries are showing their unilaterality if ever the digital tax opposition fails to be implemented. The UK treasury chief Phillip Hammond will be ready to give his annual budget statement on Monday said earlier this month that his country is willing and ready to. “To go it alone with a digital service task”.
The Asian countries and the North American countries and the UK, are willing to continue with the digital tax even if any upheavals is to take place in EU. There are efforts are likely going to make different taxes to go on a book. Despite the fact that Europe is one of the largest global markets for tech companies, taxes across Asia in digital domain could find its way because of the greater number of internet users, even though European Union estimates that the proposal could yield about a 5 billion euro. In South Korea, the lawmakers will be holding a meeting that may last for a week on the imposition of a new digital tax on tech companies. The lawmaker’s did sense that taxes are not been paid according to companies general profit or revenue. They estimate a generation of 500 trillion won by the digital firm giants, but the taxes paid was at a minimum rate of 100 million won, which is more than less of what a local company would pay.
Taxes across Asia including countries like Malaysia had considered adding in digital taxes to their 2019 budget speech on Nov. 2. After that review, Malaysian deputy finance minister Datuk Amiruddin Hamzah, said, “if we put this matter aside, I think the nation will be losing revenue”.
The digital tax opponent group stated that a new set of rules that vary from country to country can greatly affect smaller firms. There are disagreements from the digital tax opponent. They also stated that the whole proposition could lead to a more taxation on profits that will bridge international trade and stop investing in the country.
Well, the technology industry also is in support of the opposition. A meeting was held in Washington DC on Friday by the information and technology industry council based lobby group, representing all technical firms. The said that in the meeting that the digital tax “possess the real and significant threat to companies in all sectors”. Some of the firms like FB didn’t point any contribution or reaction toward the proposition.
The question here is where should technical firms or companies deposit or pay the taxes across Asia? For all technical firms, the universal international tax principles govern all. It states that income is taxed where there is value attached”. Well, there are services delivered in some countries that offer or pay little income tax locally. Low-income tax is often seen in countries where the consumers or customers buy from the unit base directly. This mostly seen in US technical companies nowadays. These low-income taxes arise from the reimbursement of sales from the local unit in overseas after doing some marketing services.
Some of the technology firms in context of considering taxes across Asia have started out doing lot more business and offering services that have made them generate more profit, but the sometimes reportedly report on higher expenses been used that may lower their revenue rate.
The main purpose for the proposal of EU boosting tax receipts is to develop digital revenue tax of high rate companies through consumers in the region
Now, how is the proposal work? The tax is meant to stay in use until a universal declaration on how to address or support the digital economy arises. But before the declaration is made there would be for sure an approval by/from the upper hand and a total cooperation and agreement from other states.
The head of the tax policy group center, pascal saint- means, said the proposal was meant to create an incentive to progress faster. According to him, “we understand there has been some frustration, and there is a political urgency,” “that which we can’t ignore”.
The treasury secretary Steven munching on Thursday addressed the unilateral and unfair” proposal of tax, which was pointed out to the US tech firms. He requested he affiliates should within the OECD on the global plan.
Considering the expected change in taxes across Asia, Some Asian countries are now on the EU lead and have become the reference material and point of Asian countries said pang Hyo-Chang, a professor of information technology who dwelt on an article on digital taxes, which is been used by many South Koreans lawmakers.
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