Amazons tax avoidance may be sunk

I think you will find that as Amazon is an American company
It depends on which ‘Amazon’ you mean. Amazon.co.uk is owned by a Luxembourg company which in turn is owned by the US Amazon. The written evidence to the Commons Public Accounts Select Committee is quite interesting on the lengths they’ve gone to in separating tax liability from profit-making.

The "transaction" when you click "Order now" is very likely NOT in the UK. So where is the actual business done?
Under EU law, there’s no difference between distance-selling and face to face, so the point of sale is where the goods are offered – i.e. where the customer accesses the website.

The ultimate responsibility for corporate tax avoidance lies with law-makers, true. It would be disingenuous to claim that the corporations are mere passive recipients of tax law, though. They lobby long and hard for favourable changes and exceptions, a means unavailable to small businesses and the overwhelming majority of private individuals.
 
Globalisation was not a choice, it was the inexorable result of the march of technology, particularly the internet and containerisation.
Globalisation's been a factor of international trade since it existed. Similar effects did for the fiscal bases of a number of the ancient empires and you only have to ask the Dundee jute weavers for a relatively recent example of outsourcing.

Technology has at best assisted the trend. The main reason countries in the developed world are feeling the adverse effects rather than the positives as previously is that the pendulum is swinging back away from them again. Go back a few centuries and you'll see much the same arguments being thrashed out in Parliament and the popular press.

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.
Supremely ironic aside: most Marxist-Leninist/Communist revolutions had as a key plank of their agenda modernisation through scientific and technological education - something they usually managed to achieve with less than optimum efficiency...
 
Under EU law, there’s no difference between distance-selling and face to face, so the point of sale is where the goods are offered – i.e. where the customer accesses the website.
Helpful - thank you. This explains why, when I buy from Amazon, it arrives VAT-free ... and is also exempt our 5% GST if it costs <£240*. Although some indirect sellers don't deduct VAT, so I don't buy from them.

Our Government is now trying to get Amazon and the like to charge 5% GST on everything shipped here, in an attempt to make on-line shopping less attractive and support local shopkeepers.

* Was peeved to buy a new TV last year from Amazon, which cost £240.08 and thus attracted £12 GST :-(
 
It depends on which ‘Amazon’ you mean. Amazon.co.uk is owned by a Luxembourg company which in turn is owned by the US Amazon. The written evidence to the Commons Public Accounts Select Committee is quite interesting on the lengths they’ve gone to in separating tax liability from profit-making.



Under EU law, there’s no difference between distance-selling and face to face, so the point of sale is where the goods are offered – i.e. where the customer accesses the website.

The ultimate responsibility for corporate tax avoidance lies with law-makers, true. It would be disingenuous to claim that the corporations are mere passive recipients of tax law, though. They lobby long and hard for favourable changes and exceptions, a means unavailable to small businesses and the overwhelming majority of private individuals.
I didn't know the EU law bit, cheers.

Frankly, for the 1% margin they make, vs the 20% VAT take, let alone the corporation tax, if I were Amazon, I'd tell the UK to shove it. Close the lot down, fire the employees and make a point.
 
1% profit on their volume of sales is still a tidy sum and they didn't get the size they are by turning down money when it's thrust at them.

I'm minded to believe a similar logic would apply whenever any large multinational talks of consequences for not letting it have its preferred way.
 

seaweed

LE
Book Reviewer

seaweed

LE
Book Reviewer
A couple of worked examples of Canuterie (yes I know he was only trying to teach his people the facts of life), from the sixties/seventies:

1. India refused to allow the import of computers, hoping to force IBM to set up a plant there. IBM wouldn't play and so Indians were stuck with the pre-System/360 1401 which was not programmable in a high level language.

2. Brazil made it a law that all computer transactions had to be remade manually in hard copy, for instance if an engineer ordered a spare part a clerk had to be employed to create a shadow transaction on paper. The business was done on the computer and the paper just piled up in a corner.

Each of these measures drove up costs and so held back economic growth.

The same sort of protectionism and resulting cost inflation was visible in our Govt forcing the RAPC to buy ICL.
 
Surely if Amazon is not making money it cannot pay its shareholders dividends?
 
Amazon has strikingly poor profitability because its growth strategy is seriously expensive. It is expected to end 2014 with a global profit of $349M on sales of $75B. To put that in to perspective, it made $359M on sales of $8.5B in 2005. Net margin is in the 2.5-3% range.

Amazon's strategy is and always has been "revenue now, profits later". It has consistently gone for growth; its shareholders benefit in share price rather than dividend. Problem is others are muscling in and they haven't gained the global dominance their strategy requires.

Still, which would you prefer? Amazon pushing down retail prices, breaking cartels and price fixing or Amazon making big profits and paying tax on them?
 

jarrod248

LE
Gallery Guru
Amazon has strikingly poor profitability because its growth strategy is seriously expensive. It is expected to end 2014 with a global profit of $349M on sales of $75B. To put that in to perspective, it made $359M on sales of $8.5B in 2005. Net margin is in the 2.5-3% range.

Amazon's strategy is and always has been "revenue now, profits later". It has consistently gone for growth; its shareholders benefit in share price rather than dividend. Problem is others are muscling in and they haven't gained the global dominance their strategy requires.

Still, which would you prefer? Amazon pushing down retail prices, breaking cartels and price fixing or Amazon making big profits and paying tax on them?
Amazon is amazing. Imagine an ability 20 years ago to order just about anything from anywhere while sat on your hairy end.
I don't care what tax they pay or don't pay I need them. That horse linament didn't help my hip though.
 
Recent news item re Amazon said it doesn't actually make a profit, it goes for growth instead. Interesting model!

http://www.telegraph.co.uk/culture/...-Hachette-today-books-tomorrow-the-world.html

I do wonder how the money works for free or very cheap Kindle downloads for instance.
I'm sure I remember reading that Amazon sells ebooks at next-to-no profit or even a loss just to encourage people to visit the website. Which probably helps to encourage people to visit Amazon to buy other things.
 

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