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Amazon Pays No UK Income Tax, Under Investigation
New submitter artciousc writes with news that Amazon is dodging taxes in the UK. From the article: "Regulatory filings by parent company Amazon.com with the U.S. securities and exchange commission show the tax inquiry into the UK operation, which sells nearly one in four books sold in Britain, focuses on a period when ownership of the British business was transferred to a Luxembourg company."
Clever trick there: "The UK operation avoids tax as the ownership of the main Amazon.co.uk business was transferred to a Luxembourg company in 2006. The UK business is now owned by Amazon EU Sarl and the UK operation is classed only as an 'order fulfilment' business." The HMRC is investigating the legality.
It would be really difficult to structure a tax with the incidence falling solely on setups like the one Amazon has here, especially since the UK is part of the single market. This is most likely an issue that would have to be solved in the European Courts rather than by the UK government. I doubt that a few hundred million pounds in lost tax revenue would persuade the courts to force a major restructuring of trade. I am not expert on European jurisprudence though.
This is a legitimately complex issue of tax avoidance. Most of the time when people howl about corporations paying low effective tax rates it's because they don't realize all of the exemptions for favored industries (green and bio tech, aerospace, etc.) and absorbing losses create that outcome. Here we have a government stretched thin on revenues up against the framework of European economic integration.
I got a catholic block.
That's a very broad and legally vague concept.
If Amazon succeeds I expect many other international businesses to incorporate in the UK and attempt the same. In fact, they would be fools not to.
You certainly are not buying civilisation with taxes, if that were even remotely correct, we would have had 'civilisation' much earlier, and when I say: "civilisation", I am talking about the rapid progress that we have enjoyed since the beginning of the free market capitalist movement and industrialisation.
You could pay all the taxes you wished forever and ever, and you have, since before the pharaohs and on and on, but the only "civilisation" that you got was on par with those pyramids - the tombs for the Kings.
The real civilisation cannot be bought with taxes.
The real civilisation is created in the free market with people making everyday voluntary decisions on what to buy, making everyday voluntary decisions on what to work on, what to produce, how much to save, where to invest, etc.
None of what you believe to be 'civilisation' is actually that.
You can't handle the truth.
...taxes pay for things from which enable Amazon to have a business at all. Amazon can sell books to us because we're a reasonably literate population. They can get stuff distributed because we have a good road / rail network which is maintained. We have mechanisms in place to dispose of the masses of card packaging that Amazon use. We have employees who are kept reasonably healthy by the NHS (I'll understand if American readers are confused on this point - we have a decent health care system, America doesn't). All of these are the result, essentially, of taxpayer-funded state investment. So, by not paying taxes, Amazon are benefiting directly from such investment without contributing to it which, I would argue, is unfair and parasitical. I saw a great suggestion recently which was that if all of these anti-tax companies really wanted to put their money where their mouths are, they would set up shop in some crummy backward little country that doesn't bother with taxes and consequently has very little in the way of infrastructure, health, literacy etc. That's what small (or no) government gets you. If they decide they'd rather do business somewhere more advanced, they can damn well pay their fair share for the upkeep of the place.
The real civilisation cannot be bought with taxes.
The real civilisation is created in the free market with people making everyday voluntary decisions on what to buy, making everyday voluntary decisions on what to work on, what to produce, how much to save, where to invest, etc.
So where does public infrastructure fit into this scheme, especially the funding of it? How are the following funded: roads, sanitation systems, legal and judicial system, police, etc? Is that funding to be entirely voluntary as well?
About 50 people so far have given some variation of, "Well, if it's all legal then it must be ok." It's not troubling to anyone that they worked within the law to create a fiction, which is that they don't really operate or exist in the UK? It's wrong because it isn't true. Like in the USA we had Reagan redefine ketchup as a vegetable or something. I say this almost ever time this topic comes up, but it really seems to me that libertarians are nothing more than the useful idiots of big business. Sure, they like to think they support business in general, but it's always big business they rise to defend. As if Amazon needs defenders.
The problem is that Amazon (a US company based in Luxembourg) are tax exempt, while local companies that employ local people and contribute to local society are not. Amazon has a price advantage by virtue of a £0 tax bill, and UK-based companies can't compete.
You need to either tax Amazon or stop taxing local companies in order to restore competitive balance. As colossal tax cuts for big business aren't top of the agenda in the middle of a painful economic slump and massive budget deficit, the former option needs to be investigated.