Will EU make people to leave the tech talents? New types of tech taxes are emerging.
Lately, I have been spending a lot of time on Twitter to follow the latest events because it serves as a good app for news.
And 2 information stood out the most to me:
France: Deputies have adopted an amendment providing for taxing digital data producers at a rate of 5.5 cents per Go transmitted.
Germany: German Minister Proposes Tax on AI Value Creation
These things can discourage people from creating value / running tech businesses, as they use a lot of the internet and AI. (Especially if other countries would follow this pattern.)
Do you think that it will make European-based companies leave the countries which want to apply these laws?
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I think higher taxes could push some tech companies to relocate, but the bigger factor will be whether Europe can offer a competitive environment for innovation and growth
@shivam_kushwaha16 The only innovation I witnessed:
@busmark_w_nika Exactly, higher taxes are only one part of the problem. Talent, funding, infrastructure and business-friendly policies also play a huge role in keeping innovation alive
interesting! i wonder what this feels like for a small team. big companies have their legal team, tax team and even hire consultants. on the other hand, technofeudalism feels more real than ever.
curious if anyone building in France has worked out what 5.5 cents per GB would mean for their product yet?
@khanh_murror I am in general what will happen, with those protests and riots, many people (especially makers) consider to reside somewhere else.
One of the best things in Europe is lack of beaurocracy when starting a new company. As an immigrant I find that a plus point in Eu. Hope they don't tax the hard working class more and more. It will certainly discourage individuals from contributing.
@webdevsid I think that it is the opposite. Maybe they do not have so much bureaucracy for newcomers as some sort of benefit so they are more likely to run a business. But we have a lot of admin work there actually :D
As an EU solo builder doing data/AI stuff, the France one (5.5c per GB transmitted) is the
one that gets me — it taxes the plumbing, not the profit. Anything data-heavy moves tons of
GB, so you're basically taxed for doing the thing. The German "AI value creation" tax feels
way too vague to actually enforce.
Do I think people leave? Not physically — most of us are tied here by life and customers. But
more will quietly incorporate elsewhere (Estonia, US LLC) and fewer new things get started.
And these are still just proposals, so who knows. Mostly it's the vibe that stings: the EU
keeps signaling it'll tax the inputs of exactly the businesses it says it wants.
Curious what else you're seeing on there 👀
@fredxhansson I think that the EU is becoming with ridiculous things and it is not gonna help anybody. It is going downhill.
Thanks Nika for bring some attention to this issue.
I don't think destination-based taxes can be escaped by relocation. A tax on data delivered to French users applies where the publisher or developer is located.
My concern is the uncertainty around legal and government regulations like taxes. Founders and investors have to price in a possible levy before getting to know the scope of their projects. That chills experimentation especially for solo founders and small teams. I also think that AI is better treated as a general-purpose tool and if anything at all should be taxed as its own category. If the goal is capturing value, existing corporate tax mechanisms provide a clear route than a technology specific levy.
I don't know but I am curious how others here weigh the revenue argument against the risk of uncertainty.
@richatsealedvault The problem is that we are becoming very restrictive to anything that could improve conditions or our potential. I do not like the way it is evolving.
the per-GB framing is the part that worries me most, running a voice infra company. a flat tax on data transmitted charges by volume, not by value extracted. a company sending 10kb per API call and charging $50 a request pays almost nothing per GB. a company whose product is literally continuous audio or video pays proportionally far more for doing the same amount of "business." it's not neutral across business models, it specifically taxes anything bandwidth-heavy by nature - voice, video, real-time data - regardless of margin. odd thing to target if the actual goal is capturing value from large platforms rather than just whoever happens to move the most bytes.
@galdayan It is even worse, some countries started applying taxes when you want to leave the country :D so they can keep some entrepreneurs inside the country. I think that Itally came with that.
It will be fun to watch Netflix in France 😂
@bengeekly Ouch :D I am really scared how things are going downhill. It is sad.