Digital tax - impact for for big tech?

Hey so a few starting points, sorry about long post.

(1) a lot of major US corporations (Apple, Google,Microsoft) effectively manipulate their tax residency to reside in Ireland and benefit from its low corporation tax rate (12.5%)

(2) In reality, these corporations often pay closer to 0% corporation tax in Ireland, as the Irish government offer various tax incentives to attract these companies to Ireland. This is well documented in various tax cases between Ireland, Apple, the EU.

(3) The EU and US have been unhappy about this situation for a long time, for obvious reasons about reduced tax take in their own countries

(4) Last week the G7 (grouping of major countries, US,UK,Japan etc but NOT China or India) met and agreed proposals for global corporation tax harmonisation (15%) but more importantly rules suggesting tax would be claimed where sales are made for these companies rather than where the physical presence of the company is.

(5) if the proposals do not get global approval, it’s been suggested that countries will introduce so called “digital taxes” aimed at targeting the enormous profits of these corporations.

I understand that these proposals would take G20 approval and would be finalised by the OECD and will likely take over a year to transpire

But this may have some impact on these companies (or more importantly their share price)

If anything, a big govt push like this would further the adoption of untraceable digital assets like BTC, ETH and ADA.

In order for value to be retained, it needs to move out of the dollar standard.

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@stonkbroker @kunal @rafy would love to hear your thoughts on this

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+1 there on the digital asset point.

Cryptos are gonna see a nice bump as the US Dollar gets turned into monopoly money by our beloved money printer and people find value in other assets.

As for crypto adoption - I don’t think we’ll see much mainstream use of crypto until a CB announces a state-backed stablecoin…

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I think it won’t affect the share price. Why would it affect? The govt is not doing anything unethical they are just asking for money because companies operate in these regions.

If you are making billions of dollars in a year then you need to pay taxes. Maybe 15% is too high but I don’t see anything wrong.

Wrt digital assets, yes with growing popularity the emerging markets will start to implement like El Salvador did by adopting bitcoin. I see Dubai also implementing something very soon because Dubai is forward-thinking when it comes to things like this.

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It will impact share prices. Quite directly, actually. All we need to see is the current effective tax rate paid by these organizations (potentially in lower single digit percentages) of their Pre tax numbers (tens of billions).

An increase in taxes has a proportional impact on earnings, and a direct impact on perceived growth. As growth and earnings decline, so do valuations, the impact of which cascades down to share prices.

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@stonkbroker Another viewpoint is how such rumors could impact lobbying expenditures. Are we tracking corporate jet activity or nah?