Amazons tax avoidance may be sunk

It's all part of globalisation. We buy cheap products from low cost manufacturing countries, manufacturers ship profits to low tax rate countries.

Interestingly countries don't seem as keen on allowing individuals to be "global" when it comes to income tax. The Australian Taxation Office insists that I have to pay Australian income tax as I am an offshore resident - based upon me having a container full of homeware in storage.

Bastards.
Different things, there's a good argument that companies should not pay tax at all.
 
Different things, there's a good argument that companies should not pay tax at all.
I concur. No taxation without representation for a start.

Sadly there are members of the economic community who think tax is a good thing for various reasons, and think consumption tax is unfair on the poor. I disagree.
 
It's all part of globalisation. We buy cheap products from low cost manufacturing countries, manufacturers ship profits to low tax rate countries.

Interestingly countries don't seem as keen on allowing individuals to be "global" when it comes to income tax.
The Australian Taxation Office insists that I have to pay Australian income tax as I am an offshore resident - based upon me having a container full of homeware in storage.

Bastards.
spot on, probably because I don't have the finances to lobby government or offer non-executive directorships out

self serving c+nts
 
spot on, probably because I don't have the finances to lobby government or offer non-executive directorships out

self serving c+nts
Australia is now one of the growing number of nations that consider you to be a taxpaying citizen irrespective of where you live.

The rule until 2009 was if you were offshore for more than 90 days you had no tax liability for income earned in that period. This was the Section 23AG exemption ruling.

Now they say if you have ANY permanent connection to Australia you must pay Australian tax rates, and claim back any tax you paid overseas. And that 'permanent connection" includes owning property, having a bank account or having family here.

The problem is if you pay offshore taxes it can take up to 5 years to get it back, so you may pay 30% effective taxation n one country AND 30% in Australia, and it may take you year t get back the double tax payment.

Its another insidious part of globalisation.

I have told the ATO to shove it up their arse.
 
Yep, LARGE company I worked for a couple of years ago lost its entire Aussie graduate trainee population when the survey vessel went into Australian waters and they realised they were going to get taxed out of existence

Not sure how it worked but none of them came back once they'd done the maths
 
How about no representation without taxation? That would stop "Workers'" Paradises like Liverpool and Tower Hamlets returning any more loony left governments?
Absolutely - not necessarily a directly proportional link, but the idea that you have a say in how taxation is spend when you don't contribute to that tax is absurd.
 
Daz
Read it again, Amazon are NOT I say again NOT paying what they supposed to pay, they are paying what they WANT to pay, which is a whole lot less than what they are supposed to pay. This has got nothing to do with allowances or the tories or labour being at fault. This is about a global entity behaving like a thief in the night and telling the UK regardless of the need to fund the NHS, the State Pension, the Armed Forces etc, you will have to do all that with out any meaningful contribution from Amazon. even though their suppliers, their business outlets and even their staff are ALL located in the UK.
I think you will find that as Amazon is an American company, only about 10% of the company's revenue comes from the UK. Their suppliers, business outlets and staff are FAR from ALL being in the UK. Just the ones that deal with local issues to the UK. As an example, there are roughly 40 warehouses in the US, but only 8 or so in the UK. Global sourcing will mean that the products they sell aren't necessarily paid for from the UK, but delivered to the UK for onward delivery to customers.

I work for a small multinational. We are UK based, with operations in the US and India. We make no profit at all in the US, or India. It's all in the UK, where the most benefit can be had from the tax regimes, and where most expense is. 80% of our costs are in the UK, but 70% of our revenue comes from outside the UK. Makes perfect sense that we would want the profit and any tax to be where the costs are. I am sure Amazon are doing much the same, but on a vastly larger scale.

The fact that UK pounds are pouring out of the country into Amazon's coffers is just unfortunate for the UK. They "pile 'em high and sell 'em cheap". If Tesco had made a success in the US and the reverse situation, I highly doubt that there would be any guilt at Tesco HQ for extracting any profit and minimizing (US) taxes. Or Rolls-Royce jet engines. Or Jags, Land Rovers, Lush soap, etc etc.

Amazon is a bit of a special case (or an example of a special genre). Their "shop" is one of a number of unbelievably powerful datacenters, which could be anywhere in the world. The "transaction" when you click "Order now" is very likely NOT in the UK. So where is the actual business done? Where the datacenter is, but that can vary between successive identical transactions. Once you confirm the transaction, the banking system is billed, and the only thing left to do is to tell the most local warehouse with the item to put it in a box and send it out. Again, that can vary. I can order 8 things from Amazon, all for delivery on Monday, and get three shipments, because they came from different warehouses. In the US, these would be perhaps in different states. In Europe, they may from different countries.
 
Their suppliers, business outlets and staff are FAR from ALL being in the UK. Just the ones that deal with local issues to the UK.
Plus, what small percentage of their profit that is generated locally is generated in their warehousing and distribution busies, the bit which is (relatively) capital intensive and therefore attracts capital allowances.

Amazon are doing exactly what they are supposed to do over tax; avoiding un-necessary liabilities and minimising their exposure. The Directors of Amazon are responsible to their shareholders, not the UK government or taxpayer.
 
The fact that UK pounds are pouring out of the country into Amazon's coffers is just unfortunate for the UK.
globalisation came the fore in the mid 1990s, and was proposed for a wide range of reasons.

The left wing thought it would provide work in developing nations, and lift their standard of living (which it has, but at the expense of ours..)

The right wing thought it would provide cheap labour without on-costs like OH&S, Pensions, healthcare, etc.

But no one, not even the smart economists, really thought through what would really happen in a globalised economy. The GFC is a direct result of the globalisation of the 1990s. Many of the current political disputes go back to the same cause.

And worst of all, for the developed nations, their tax base pretty well vanished. Workers lost jobs and companies off shored tax liabilities to low tax regions. The answer so far has been to print money and cut back on costs - especially welfare.

And here we are today.
 

seaweed

LE
Book Reviewer
Globalisation was not a choice, it was the inexorable result of the march of technology, particularly the internet and containerisation. It is technology that has been changing society for over two hundred years and will continue to do so - you ain't seen nothing yet. Luddite attempts to hold back the tide have, for instance, destroyed the London docks - replaced on site by the brave new world of international finance etc.

In my view the only way to stay up with the winners is through better and more scientific education, something successive governments have funked ever since Marxists took over the public education system.
 
As I expect to be paid at a higher rate to reflect the inconvenience and unpopularity of working on a public holiday I fully expect anyone working on such days to be paid more. Since public holidays in the UK are part of the statutory leave entitlement the at the least I would expect that public holiday worked to be included as part of the holiday requirement for that member of staff. Since Amazon in the UK has used every legal trick in the book to avoid paying tax and treating their staff fairly whilst doing their utmost to screw their suppliers........
But how would you feel if when you are buying your stuff on-line on a Sunday night you got a message saying "because you are buying out of normal working hours we are charging you a 5% surcharge. Rest assured our hard working staff will reap all the benefits once we have deducted taxes, business rates and other government charges"

Shops could also easily charge more for out of hours, weekends and holidays but they don't (well they do - they just add the cost to all their goods, don't tell the sheople that though!)
 
Shops could also easily charge more for out of hours, weekends and holidays but they don't (well they do - they just add the cost to all their goods, don't tell the sheople that though!)
Australia has government enforced "penalty rates" which mandate the multiples of pay that must be paid at weekends and public holidays. You sometimes get charged more for a product on a public holiday, particularly in the catering industry.

Lots of businesses don't open on holidays and have limited weekend opening hours. Wander around Sydney's tourist traps on a public holiday and threw will be lots of restaurants and cafes closed. Cruise ships often doth bother coming in. Net effect, staff in a highly competitive, low margin, low pay sector miss out on working public holidays when they should be pulling big tips.

Businesses pay the market rate for their labour, which is often a major element of their cost of goods sold. Manipulate the market through legislation and you will get unexpected (or are they?) consequences.
 
Globalisation was not a choice, it was the inexorable result of the march of technology, particularly the internet and containerisation. It is technology that has been changing society for over two hundred years and will continue to do so - you ain't seen nothing yet. Luddite attempts to hold back the tide have, for instance, destroyed the London docks - replaced on site by the brave new world of international finance etc.

In my view the only way to stay up with the winners is through better and more scientific education, something successive governments have funked ever since Marxists took over the public education system.

whilst I in part agree with your comments, I also disagree with much of it.

Technological development and globalisation are two completely different issues. True they overlap in some areas, but in many others there is no connection.

Zero import tariffs encouraging the importation of foreign manufactured goods sounds like a fine idea. A "level playing field". But it isn't level. Taxation, welfare, income levels and standards of living, OH&S, pensions etc. are all indirect cost components of the cost of locally manufactured goods.

To compete we must forgo those benefits - dragging our society down to the level of the third world (something that is happening already). OR - we have to add a equilibrium tariff on imported goods until the third world implements these benefits.

In reality the push for globalisation was made by senior economists in the full knowledge that it would slow down consumerism inflation in the West - a deliberate and dangerous game changing decision. They simply didn't bother telling the prols that they would lose their manufacturing jobs and standard of living.

It did work though. Look at the economy of the West now as proof.

I agree about the London docks. Luddite attempts to avoid containerisation let to a thriving port completely closing down.
 
I heard a saying a long time ago - "when the worker can afford to buy what he makes, then you have lost".

I suppose that's true, if you're talking about cars, but probably not if the worker is a machine minder making nuts & bolts.

In general, the manufacturing jobs in the UK priced themselves upwards. No coal, steel or ships to speak of. Jet engines, composite aircraft wings and luxury cars still cut the mustard though.

The problem comes when the Chinese price themselves out of it. They will end up buying from Africa, and then when the Africans are where the Chinese are, who will make the commodity items for bugger all wages?

About 10 years ago, I bought an electric carving knife in the US. It had been made in China, and imported. The manufacturer, the wholesaler, the shipper, the importer and the retailer all made profit. It still cost less than $10, and wasn't on sale or anything like that. Just the regular price. How can the Western economies cope with that shit? And that was 10 years ago. It might be $11 now.
 

seaweed

LE
Book Reviewer
Bummers, my point (not well expressed) is that the internet (technology) is what makes instant ordering, instant payment etc possible and thus allows a manufacturer in China to be ordered by some middleman to ship to the end consumer, e.g. when I needed a new battery for this lappy. Containerisation also facilitates globalisation by marvellously reducing shipping costs, allowing end-to end shipment with no intermediate cargo handling; it is itself facilitated by the internet which carries detailed information on the container's contents, destination and whereabouts etc. and has been doing so for over twenty years. Our container ports are behind the curve already, have a look at how Singapore's more highly automated container port works. See also how automation has changed employment in the car industry.

Previously steam, electricity, the internal combustion engine - all aspects of technology - all changed society in ways that were never anticipated in advance. Technology in the shape of advances in medicine e.g through our growing understanding of genetics/DNA is what will lead to us living longer and if that doesn't change society I'll eat my hat (if I have any teeth left). In the shape of GM crops (like, in the future, four-chromosome rice) MAY make it possible to feed many more people, and society is certainly going to be changed by that.

All of this has the potential to change global society into haves and havenots in an entirely Darwinian manner. Enjoy the 21st century while it lasts.
 
All of this has the potential to change global society into haves and havenots in an entirely Darwinian manner. Enjoy the 21st century while it lasts.
Agree fully.

I argued long and hard some years ago about exactly this. My prediction was that instead of a wealthy first world and a poor third world, we would end up with the equality the socialist economists were trying to achieve, but with both third world poor and first world wealthy people in the same country.

And we are well on the way. In third world Asia there is a burgeoning middle class who buy cars and holiday overseas. In cities like London and Sydney there are beggars on the street in increasing numbers.

The cause of this will be the attempts to reduce welfare investment by first world nations, something that is already happening. We simply cannot compete when we spend so much of our national income on welfare payments.

The next stage will be social unrest as the third world clashes with the first world - not on sovereign borders but in parts of the same city, probably within 20 years.
 

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