UK Government to Tax Linux?

An anonymous reader writes "The UK government is looking at introducing a tax aimed at software published under GNU GPL. It claims that because programmers do it for free, it is losing out on income tax and that commercial software companies (read Microsoft) are at a disadvantage. Some pressure group has already put up a website with more details and news site Techworld have got a quote from a Treasury spokesman saying that they're only considering it."

This one isn't a joke

[Meor]

This being published today is just a coincidence. Check the BBC, it's been in process for a while. Puting things out for free is a compeditive advantage analogous to Microsoft providing free browsers when there is a commercial alternative.

Personally I welcome the tax, I think it will even out the playing field a bit and create competition.

Re:Even a 100% tax is ok

[bheer]

I know this is a joke, but in a way the UK (any .gov, really) bills open source already. Folk who install/deploy/sell Linux solutions pay Value Added Tax on the services they render. The only reason open source volunteers are -- and will remain -- exempt is that they don't enter into transactions with the organizations they're volunteering code to. You can't tax volunteer activity.

Re:Very cute.

[Draoi]

It looks like they bought the Google mail story hook, line and sinker.

Actually, it's true [forbes.com]

And hey look, Slashdot got a mention;

"It's going to go down in history as one of the biggest pranks ever pulled," wrote one message poster at Slashdot.org, which bills itself as a news provider for nerds.

RTFA

[Beliskner]

What is 100% of "free"?

RTFA! They want to tax the sale of open source software. I can see their point, if I'm on welfare and I write an OSS version of Oracle 10i which gets included free into the next version of Mandrake, I've just put ten thousand Oracle people out of their jobs, and if Oracle goes bankrupt, then the Country's Banks will have to write off those massive debts. Argentina comes to mind.

Re:Even a 100% tax is ok

[Gadzinka]

No, it isn't.

There was an attempt in Poland to tax linux this way. The thinking behind it was that if it is a gift for a commercial entity, than said entity has to pay Donation and Inheritance tax for it. And the base for this tax wouldn't be the price paid (zero). As it is with all donations, the base for the purpose of taxation is normal market price. Polish Revenue Service wanted it to be price of MS Office for OOo and price of Win NT/2k for Linux system.

Now, this news we are writing about is April 1st, but the history with trying to tax Linux, Open Office etc in Poland was true. Luckily it failed, although Finance Ministry didn't issue official statement or act about it in order to not tie hands of some enterprising clerks in revenue service.

Unfortunatelly I cannot find anything about it in English. If you know Polish google for site:linuxnews.pl podatek [google.pl]

Robert

Re:Even a 100% tax is ok

[ajs318]

VAT is sales tax and is chargeable on anything not considered "essential". The definition is somewhat subjective. VAT is not, for instance, charged on children's clothes {though it is charged on adults' clothes} nor on basic foodstuffs for preparation at home {but it is charged on take-away food}. Newspapers, magazines and books are not subject to VAT either.

Re:Even a 100% tax is ok

[ballpoint]

You can't tax volunteer activity

Oh yes, my government can.

If you build a house in my country, and get help from a volunteering friend, you have to be extremely careful to avoid paying VAT on his/her services. The government will assess the house, and calculate a higher VAT amount if they think that you haven't payed enough.

When Free Isn't Taxed as Free

[Anonymous Coward]

Don't joke about this. When politicians want to tax, they can get very creative and very strange.

Take cars. Normally the tax on the sale and title transfer for a car is based on the selling price. But suppose a parent wants to help out their child by selling them the almost-new family car for $1. Or suppose someone wants to help someone who's down for their luck by selling them an old beater for a work car for $1? Suppose they even give the car away?

If you think the tax will be on that $1, you don't live in Washington state. Here, the state tracks what a car might be worth had it sold on the open market and taxes it as if it sold at that price.

In similar fashion, the U.K. or any other country could tax Linux as if it were Windows. Many governments get particularly nasty with taxes that target businesses rather than ordinary citizens. They have less voter wrath to fear.

Be careful when you joke about the future. It might just happen.

Poland's Free Software Tax Proposal [in English]

[Compact Dick]

Here's an English edition of the story: Poland: It's official! Tax for Free Software [2000-11-20] [linuxtoday.com].