The this tax is an outrage thread

That’s f’ing bizarre. Governments never cease to amaze me with their ability to extend the reach of taxation far beyond what any rational individual might consider sensible or fair.

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This tax is only 5%, far less than VAT in europe. There is no reason to be outraged here, 5% is super low compared to most other countries.

Just because other governments do equally stupid things doesn’t make it better. “Electronically delivered” services have already been taxed multiple times, for example as business tax in the provider’s own country and as local VAT and local business tax (for internet connection) in the destination country.

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Well, not sure what you are really getting at. You mean taxes in Taiwan are already too high and they should be reduced, or ?

In Taiwan the taxes as a % of GDP is on the low side compared internationally, and we get quite a lot in return.

I’m saying there comes a point where (a) the costs of administering a tax are likely to outweigh any benefits to the country and (b) the taxation itself oversteps the bounds of both propriety and logic.

I agree that Taiwan generally gives good value for the taxes collected, but I object to fragmented, burdensome tax policies because they waste everyone’s time and money.

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This electronic service has not been taxes multiple times, only once in form of VAT in Taiwan. If the company makes a profit on delivering the service there would then eventually be a corporate income tax levied.

That’s twice at least, then. Three times unless the service provider is operating in a country with no business tax.

Even accepting your assertion at face value, the consumer is already paying VAT on his internet service, so why levy another form of VAT on services delivered upon it? It’s just pointless.

The VAT is paid by the recipient, not the person delivering the service.

The provider of the service might pay some corporate income taxes, but that has nothing to do with the recipient in Taiwan.

Eh? So if I pay VAT when purchasing my TV I should not pay VAT anymore on netflix? Do I understand you correctly ?

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I think we’ll just have to agree to disagree on the right of the government to impose onion-like layers of taxes, or the usefulness of doing so.

I would argue that VAT is a fundamentally stupid idea, partly because it results in this sort of contradictory and confusing situation. While VAT is nominally paid by the consumer, it is collected by corporations (an unpaid variation on ‘tax farming’) and is effectively a sneaky way of imposing a very large business tax (large because the profit on any product is rarely more than about 5% of its retail value). VAT is horribly difficult to administer, but governments love it precisely because it brings in shitloads of cash.

In the OPs case, a corporation has agreed to collect taxes on behalf of a foreign government, presumably without compensation for that overhead. This sets a very dangerous precedent: if every country on the planet decided to do this, internet-based service companies could find themselves snowed under with paperwork and tax bills.

I split this to try to keep the philosophical discussion separate from the Q&A about the current situation in Taiwan. Carry on, everyone. :slight_smile: