Last weekend a Dutch financial newspaper (Het Financieele Dagblad) reported an opinion of professor Arnold Smulders of the University of Amsterdam. He states that internet firms should pay taxes bases on the number of clicks, instead of the intellectual property which they hold.
The reason for stating this was that the French newspaper Le Parisien reported that Airbnb paid less then €100.000 in taxes in France last year, even though 10 million users used the platform. The French minister of finance noted that they expect internet companies like Airbnb contribute accordingly to the French tax system. The whole of Europe faces this problem. Value is created in Europe, but minimal taxes are paid.
The “value created” discussion is on different level, as of now the value is created in the country that holds the intellectual property, in this case the United States. Smulders proposes a system where clicks on a website are seen as value, because this gives the internet companies their information and on its turn their value. Taxes would be bases on this theoretical value, so all clicks in The Netherlands are bases on the Dutch tax system.
At first glance this system sounds promising, taxes are paid where value is added. I doubt however, is value really added? The clicks are just data, not information. Data becomes (useable) information when insights into it are given. These insights are given by algorithms created by these internet companies. Based on this point of view, the current tax system works as intended.
If we compare internet companies to production companies, we might come close to an ideal situation where value added is evenly distributed. One could look at the clicks as raw materials for the production process, and the algorithms as the machines used to produce information. The algorithms follow the intellectual property valuation, the clicks are valued in the specific countries where they are made. A simple input, throughput, output could then be calculated. The problem this causes is the valuation of clicks, how much if your click worth…?
Source: https://fd.nl/economie-politiek/1218031/geef-elke-klik-een-waarde-reken-daar-btw-over
