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Amazon's Luxembourg Tax Deals
Presto Vivace writes in with this story of a European Commission investigation into a secret tax agreement between Amazon and Luxembourg. "Leaked tax documents from accounting firm PwC in Luxembourg show how Amazon sidesteps the 30 per cent tax rates local [Australian] players face. The Luxembourg documents, obtained in a review led by the International Consortium of Investigative Journalists, contain some of the first hard numbers and details on how Amazon pays virtually no tax for its non-US earnings, including in Australia. Last month, the European Commission announced an investigation into the secret 2003 advance tax agreement Amazon struck with Luxembourg that is the key to its global tax strategy. The Luxembourg documents show not only the extent of the related-party transactions in Amazon's Luxembourg companies but how Amazon has changed its tax strategy after investigation by French tax authorities and the US Internal Revenue Service. The change is so dramatic it raises questions whether the European Commission is targeting the right transactions."
Cool, the people involved in this are going before a jury, right? ...right?
Paraphrasing John Gilmore:Corporations interpret taxation as damage and route around it.
In Soviet Washington the swamp drains you.
If not then why would Amazon being paying any taxes? Of course I'm under the assumption Amazon still hasn't made any money, if that's changed then I must have missed it...
Not only will no executives be on trial for tax evasion, and not only will they not lose any of the fortunes they have been amassing as "bonuses", but we will soon be hearing about how Amazon is broke and taxes are unfair for a company the size of Amazon (it's only good for us commoners to keep us common).
Oh wait, a few threads are already making those latter claims...
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Essentially what Luxembourg is doing here is offering tax collection as a service. Luxembourg collects a small percentage but much more than they would get otherwise, since Amazon et al. don't do much business in Luxembourg and offers these large corporations a legal shield against other countries' taxes.
This would appear to be a bug in the international tax system.
Taxes — by definition — are collected at the point of a weapon. It is perfectly natural to wish to avoid them. And we used to understand that attitude a lot better in this country — if Boston Tea Party has taught anybody anything...
In Soviet Washington the swamp drains you.
How is this different than the other zillion companies that funnel money through Luxembourg for tax purposes. Or in the US, in Delaware?
Oh, I get it....because it is a geek company, Amazon.
Why IKEA’s profits are mostly tax free
There will always be tax loopholes that allow companies to avoid paying taxes to country X on income that is earned in country Y.
One well-known form is to sell yourself to a foreign holding company in country Y, move all of your assets and employees out of country X except the few you need to serve your customers in country X, and if it helps to avoid taxes in country Y, to do all business in country X through a subsidiary headquartered in country X and keep the profits in that country so your new host country doesn't have a claim to them.
Another technique is to do all of the above but abandon the market in country X entirely (this is the "take your marbles leave" strategy).
These techniques aren't "cheap" so companies usually prefer other, less-expensive loopholes if they exist.
This seems to be what all the big companies go for. We really need to close all these loopholes. We in the us would then cover the deficit and have a crazy surplus. I have been labeled a troll for Pointing this out on slashdot earlier. Couldn't have anything to do with their ties on this issue.
U.S.A. #1
USA! USA! The greatest nation on earth.
Require them to pay taxes on the revenue locally before the money can leave the country.
U S A
Notice they don't put their businesses in some African shithole that offers no Government services. They take advantage of the services that Government provides like roads and an educated populace, but they never pay back.
So the question then becomes, is anyone running a service which makes this available to individuals for a fee? If it's legal for Amazon, it must be legal in general, right? You contract them to handle your finances or something.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I don't mind this at all really. If the governments can't come up with a reasonable tax plan that isn't a library of complicated laws, I'm happy to see companies figure out how to fuck it. If i made a lot of money, i'd try trick as well... but it's cheaper to pretend to be poor and milk the government that way for myself for the time being.
This time it's Amazon becuase of damning evidence, that's why it's them this time and not Apple or Microsoft.
However there's more to come and it looks like there's something on Rupert Murdoch's companies (Fox, Newscorp etc) in the documents.
All large companies do this. From Google to Proctor & Gamble to Microsoft. Microsoft takes much of their revenue in Reno, Nevada to avoid taxes in Washingon.
Tax havens exist from the Cayman Islands and beyond --- Ireland until recently.
Any jackass modding the above ignoramous up is doing so on being completely gullible and is a complete shit-fer-brains.
Amazon would be incompetent to not attempt to avoid taxes.
And the above ignoramous no doubt works for a company whose companies strive to avoid taxes --- you cannot compete in the economy by offering more expensive products than the competition --- not in a global market.
Priest: "Universe from nothing, no laws of physics, sped up time"+ huge discrepancies. Creationism? No. Big Bang Theory
International Consortium of Investigative Journalists is a very dubious organization too, I've seen them before and always thought they were a spook front putting out intercept data as 'Journalism / propaganda'. Any group outside of Washington that calls themselves a 'Consortium of Investigative Journalism' is guaranteed to be a lobbying front at the very minimum. How exactly did they get hold of Amazons internal secret tax documents, and come to release them? Is there some sort of mass intercept going on? The leaks from this group all look like parallel construction to me, I don't think any amount of 'investigative journalism' gets you secret documents which there are only a few copies of.
The problem there is they created an abstract property, 'IP' for fluff such as trademarks, and this was going to be the savior of the West. No longer would the West make and sell products and services, instead it would license IP rights to make and sell stuff. The US Patent Office was at the forefront of this expanding patents to cover non inventions, obvious things, and more.
But of course these IP rights can be exported far easier than a factory. You don't need to move people and machines, all that moves is a contract. It was inevitable that IP rights would be moved and licensed from the cheapest tax location. The West can't claim that IP rights should be cheap, when considering transfer pricing, and expensive when considering domestic Patent licenses. The markup on a patent license might be 100,000%!
As to the document you linked to, this is a guidance, more a case of OECD wishful thinking, because there's no mechanism in place to force companies to comply, and if any single IP right was overpriced, they would divide it down into 50 smaller rights in 50 jurisdictions. 400% markup you might be able to challenge in a court if you have the law available, but can you challenge 50 profits of 8% in all jurisdictions?
You see the problem? They wanted the IP rights to be in their own tax haven and be 90% of the costs of a company, but instead they're in a cheap tax country and that 90% is exported out of their tax domain.
When you buy something on Amazon, they increase the price by the local VAT of the EU country you live in. Where does it go? Do they return it to the local government?
Best news all day.
Amazon use that money for far, far better things than a government ever would or *could*.
Every cent Amazon keeps goes into making new jobs - they look to expand their business as much as possible.
Governments by contrast are astoundingly profligate and with the money they take are incredibly wasteful or evil. Bridges to nowhere, the national raisin reserve, the NSA, you name it.
I'd infinitely rather Amazon had the money that any government in the world.
Thank God for creative tax avoidance.
> The problem there is they created an abstract property, 'IP' for fluff such as trademarks, and this was going to be the savior of the West.
[...]
> But of course these IP rights can be exported far easier than a factory.
Yeah, I've been thinking along these lines too: with (current) capitalism being as dependent on growth as a junkie is dependent on the needle, there must be a space to grow into. Remember, this pyramid scheme has its roots on the good ol' times which culminated in the likes of the Honourable East India Company: then growth could be achieved by "discovering" new land (read: killing/enslaving those living there).
These days, all "discoverable" land is already "discovered", and some of those darn slaves are even starting to do stuff themselves. The only path of growth seems to be the Land of the Virtual Property. The Capitalistic Cloud.
Fool's gold.
If banks became the tax collectors in the country of purchase/payment, taxes would be payed where they belong.
GST is currently collected by the companies who want to minimise their tax spend.
Banks don't care, it's not their money, and they're really good at grabbing other peoples money.
Simplify tax laws, tax a reasonable amount in the first place, don't have tax refunds.
Go well
if Boston Tea Party has taught anybody anything...
Yes, what was all that about again? No taxation without representation? With all the lobbying going on, wouldn't you agree that companies are more than adequately represented for the taxes they pay? How exactly does the tea party apply here?
It's so stupid for countries to each have their own special tax exemptions thinking they can lure in some extra companies. The end result is that big companies have meaningless (=no extra jobs but empty buildings) box offices everywhere and effectively pay no taxes. Anywhere! So in the end the countries not only receive no benefits, but also less taxes from their own companies. And it heavily favors big companies over smaller ones. But I guess politics are too corrupt and big companies are paying too much 'lobbying' money to keep this stuff going.
Thank you, Bradley Manning, Edward Snowden and so many others, for courageously defending humanity, my freedom and more!
I'd rather have the money myself by paying less taxes myself and letting companies pay the difference that goverment misses out on.
Thank you, Bradley Manning, Edward Snowden and so many others, for courageously defending humanity, my freedom and more!
No. I pay taxes because it's my duty to society.
I also don't rob banks, because I consider it an obligation to society not to do so.
Perhaps you are a sociopath, and we need threats of violence to control people like you but not all of us are that way.
Companies don't pay tax.
It sounds non-nonsensical, but what underlies that statement is the general statement that within an economy, there are some entities you *in effect* cannot tax, because taxing them only leads them to raise the price of their goods and services - which is to say, you are in *fact* taxing their customers.
Government debt offer a risk-free rate of return. As such, if you have money to invest, you can get (say) 2%, no matter what. Given that, if you invest in a company and so take on some risk, you expect a higher rate of return. Companies then *must* offer that higher rate of return, or the cost/benefit of the extra risk just isn't worth it - you could be taking on a *lot* more risk, for just say an extra 1% - so no one would do it, and you couldn't get investment. (In fact, where there are so many companies, and they vary in how much risk they take, and so in how much return they take, if a company is out of line of that risk/return balance, then it cannot attract investment - investment will go to other companies).
The upshot of this is that if you tax a company, it *cannot* make less profit, because then Government risk-free debt becomes a disproportionately better choice. So you have to raise your income - and that means you have to charge more. Moreover, how *do* you stop a company changing its prices? you'd have to institutue state price controls, and those are a fabulously painful catastrophic disaster.
Corporation tax is a fiction, and this has been understood sincce 1776, when Adam Smith described this behaviour in Wealth of Nations.
Government keep on taxing in this way because it's a way to *obscure* the true level of taxation on people in general - it *looks* like companies are being taxed, and people - not knowing about this, and it's not obvious - imagine it's so, and are happy about it.
And personal tax is a myth for the same reason because I just ask for a higher salary to offset my tax burden. By that logic you can't tax ANYTHING because the cost will get shifted somewhere else.
Participants of the Boston Tea Party were not protesting the tax itself. They were protesting the fact that it came from legislators whom they did not elect, and who therefore didn't represent them.
Is *anything* they're doing actually illegal? I somehow suspect not - as much as companies don't want to pay taxes, they want to leave themselves open to prosecution even less.
The article implies strong condemnation for their practices, but the fact is that taxes aren't charity - a company, like an individual, is ENTITLED to avoid tax however they legally can.
If the tax schemes are so complicated that they prevent their own regulators from understanding what's happening, that's hardly the company/individual's fault. It's like governments write the rules to the game, and then complain when people follow those rules "But that's now how I *meant* you to play!"
Seriously, Lux/Liecht have both existed almost entirely as tax havens in one form or another for decades. To suggest that Amazon is doing anything new here seems to fly in the face of history.
-Styopa
Actually, the Boston Tea Party was far more about forcing a bunch of smugglers and thugs out of business by allowing the East India Company to undercut them, than it was about tax.
Obligatory Wikipedia article:
http://en.wikipedia.org/wiki/Boston_Tea_Party
Very good BBC Radio 4 programme:
http://www.bbc.co.uk/programmes/b01724mf
The U.S. debt is 71% of GDP. It will not take hundred of millions of years to pay that debt down.
And it means NOTHING. The money is already out in circulation. If the Federal Reserve were to just credit that money to the U.S. Government, the USG could buy back the T-bills and the debt would disappear. In fact, people would to have to invest in other things, which would stimulate the economy at no cost, and the saved interest could be put to better use.
As much as I hate drones, I prefer them to war. And yes, killing kids by dones sucks, but killing kids by a full-out war with tanks and mines (that last even after the conflict is over) sucks a whole lot more.
Replace "East India Company" with "Amazon" and "Townshend duty" with whatever that Australian tax is named... The Founding Fathers recognized the need for some taxes, so they framed their protest as against "taxation without representation". But the actual rioters back then just didn't want to pay "their fair share".
In Soviet Washington the swamp drains you.
No, dearest. It is the other way around. If, indeed, the tax-avoidance was only found among sociopaths, the Executive (IRS) wouldn't have needed the investigative apparatus, its own "Tax court" (whose Judges the President is empowered to remove at whim), and the power to confiscate property and bank-accounts (on mere suspicion, neither proof nor even an accusation of wrongdoing is required), and to garnish wages.
If parasitic sociopaths like myself truly were a tiny minority you allege us to be, why have the tax code at all? Have responsible folks like yourself pay what each believes their fair share to be, and shrug at the non-paying sociopaths the way you shrug at a similarly anti-social drunkards.
Indeed, why do you trust the IRS to determine your fair share — why don't you pay more? It is easy — and the Treasury encourages such gifts.
If most of us were not that way, then we would've been getting by just fine on voluntary donations — as, indeed, we were throughout the 19th century.
But then the government types decided, the benevolent and omniscient government officials are better at running various things — and the taxes went up... Today I pay at least 50% of my earnings to various tax-authorities (Federal, State, and local) — plus the sales tax. I don't like it one bit — I'm perfectly certain, I would've spent it better than Charlie Rangels in Congress do — and only the threat of violence keeps me in line.
No, it is not your obligation to society — it is your obligation to the owner(s) of what you would've misappropriated. Derived, of course, from your inner subliminal unwillingness to see the same sort of thing ever done to yourself.
But I do find your equating obligations to the government with those towards fellow men interesting. Perhaps, you'd be better in a country driven by Confucian or similarly Socialist principles, rather than the Individualist America...
In Soviet Washington the swamp drains you.
At least Amazon has a substantial office in Luxembourg, handling AWS. I'm sure they don't do a lot of sales there, but they at least have a presence there. According to http://ict.investinluxembourg.lu/ict/amazoncom there are about 500 Amazon employees in Luxembourg. I interviewed for a job there a few years ago but screwed up one of the interviews pretty badly and didn't get the job.
It's possible or even likely that Amazon had to open an office of a certain size in Luxembourg as part of the deal they worked with the government to obtain the tax incentives.
www.clarke.ca
Don't worry I'm sure we can trickle down enough to pay for your schools. Well if we don't skip town or create a new think tank slogan to make you think those damn unions are the reason your schools suck so much. Because certainly you want to very lowest payable person teaching your children and our future how to think.
Wonderful.
Remember there are not enough smart people in America for Programming, what could possibly go wrong.
The exact amount we have the responsibility to pay is a matter of consensus. I think I should pay a certain amount. If society thinks I should pay less, I'll happily agree. If society thinks I should pay more, then it would be rather hypocritical to disagree. If you made an offer of $100 to buy an item from me and I said "No! It's only worth $50" are you going to haggle over the price and insist on paying the extra?
Our means of establishing this consensus sin't all that good, but it's a lot better than "everyone pays what they think".
As for not robbing banks, certainly I wouldn't want someone to steal from me. I also don't want other people to rob from banks, or the banks to rob from other people. I think a society where people don't rob banks is better for everyone, not just the banks.
I don't pay taxes to "the government". The government is an elected team of administrators. It's odd to anthropomorphise the insttution considering the actual people change frequently.
I do live in a country driven by certain socialist priniples, (but not Confucianism). It's pretty nice. We have an efficient public transport system throughout the country, affordable health care, a safety net if I lose my job, and mandatory paid vacation. We also have a government that we select through a process of democracy, that I can become a member of if I think they're not working for the betterment of society as a whole.
Clearly there's a problem in the US where apparently there's a ruling class that you have no say about, and taxes that are spent only on the ruling class and not on the betterment of society.
That's your call, if you believe that you 'owe something to society', you are free to pay all you want, nobody stops you.
You are a free person and must not be stolen from. Society doesn't actually exist, there are only individuals, some steal from others, that's all it is. You shouldn't be forced under any law to have part of your life taken from you to pay any sort of 'duty'.
You can't handle the truth.
Pretty certain society exists. As far as I can tell, I have interpersonal relationships with lots of other people and they have interpersonal relationships with more people forming a web that includes everyone in the society.
Unless you can find a way to live your life without affecting anybody in the world then you are part of that society.
It is only hypocritical for those, who proclaim their trust in government determining the amount for other people...
But, hypocritical or not, you pay more than you believe is fair because you can not avoid it — on pain of having armed men come in and evict you from your house (though I doubt you have one, if you aren't American).
People disagreeing about a price are welcome to not commence the transaction. There is no such freedom with taxes — and the taxpayers are forced into paying. All taxes are collected like that world-wide, that's a given. What it means, however, is that these monies can only be spent on things, only government can provide — such as military and law-enforcement — not transport, not health care, not food... It is simply immoral to force Peter to pay for a bus line, which will help Paul get to work... And it is outright outrageous to force Peter to pay for Paul's food and housing.
You may have been brainwashed into believing, that's the only way to live — and that those "elected administrators", in their omniwisdom and benevolence are the best at deciding, how to spend other people's money. Better even than the people themselves are. You have the excuse, that those ruling you have a (very) vested interest in perpetuating your belief. But you should've recognized the truth, when it slapped you...
Having visited Europe many times, I can "clearly" see, you live in poverty. Your cars are too small for comfort, as are your showers. Your food is expensive — and so are most other goods and services. And, despite all those taxes upping the every-day prices, you are still too poor to maintain a military, that can credibly discourage Russian... Shrugs...
In Soviet Washington the swamp drains you.
Use your brain:
You pay taxes to the government, how is that a duty to society?
Government is not the society, and most of your money won't even be used to benefit the society.
Your fellow man will continue to die of hunger while you pay the governmental aristocrats.
I can't fucking understand how can a collectivist believe in governmental taxation.
Why is it immoral to force Peter to pay for Paul's food and housing? It's immoral to let Paul starve. I'm sure Paul will agree that he'd pay for Peter's food and housing if their situations were reversed, and Peter would accept rather than starve. You almost seem to be presenting selfishness as a virtue. I consider selfishness as unacceptable.
Your examples here are bizarre. You can buy large cars in Europe. And how big does a shower need to be!? Do you think that North Carolina could repel a Russian invasion without the military contribution of the rest of the US because that's pretty much the comparison you're making. Russia is large. Sweden is small. The reason we're not spending a lot on the military though, is because we find that cooperation and social reforms have reduced the need.
I pay taxes to a general taxation fund administered by the government, of which a small amount goes to the running of the government. I don't pay taxes to the government any more than I pay taxes to my accountant.
The largest sections of income tax in my home country go to welfare, health and education. Add state pensions, criminal justice, and transport and that's the bulk of spending (probably 75% or so), all of which are beneficial to society. Administration is about 2% or this.
Welfare actually allows my fellow man not to starve.
> And personal tax is a myth for the same reason because I just ask for a higher salary to offset my tax burden.
If your tax rate goes up, I mean the income tax rate, and then you try to pass this on, the company cannot necessarily simply meet your demands.
Consider that your work will generate a certain amount of wealth per hour. You cannot, for extreme example, be paid more than that. If we imagine you create 10 USD of wealth per hour, are paid 8 USD an hour but you are taxed at 50%, you cannot pass that on (asking for 16 USD), because your hourly wage then exceeds the value you create per hour.
We can say then that companies, to meet that demand, must again raise the price of their goods and services, so they can afford to pay your 16 USD per hour.
This would mean both income tax and corporation tax in the end manifests themselves fully in the prices of goods and services, and not at all in wages or corporate profits.
What?! Why? Where? Which school of thought or religions has ever said anything of the kind?
Or are you conflating the volitional charitable help to fellow human beings with the mandatory? Jesus helped the poor — and encouraged followers to do so as well — but he never called for Caesar to raise taxes and give free food to anyone...
Once again, if you are so "sure", why do you need the tax authorities to force Pauls into paying for Peters? Not encourage, mind you, but force? Why can't Paul voluntarily give Peter the extra monies for whatever service Peter goes to work to do? Perhaps, you aren't quite as sure as you claim to be...
But it not only moreally wrong to force people to pay for things, they don't want to pay for. It is also destructive to economy. If Peter's work does not pay enough for him to eat well and afford his own transport, then either he should be doing something else, or he should raise his prices. By forcing Paul to keep paying Peter anyway, you perpetuate the misery of both sides — and the economic inefficiency of making something, that not enough people want to make it worthwhile on its own.
If your friend or relative are starving, perhaps you should help them (note, I don't say "must"). But you aren't responsible for total strangers you've never seen, who — living in the same perfectly decent country as yourself — aren't, for some reason, able to afford basic necessities. Not in my school of morality. And if your beliefs are different, you are welcome to act on them by donating to a charity of your choice — but that's not enough for you, is it? You aren't satisfied, until you've forced everybody else to act as if they were their beliefs too — and that's immoral.
There you go — this one phrase is the tell-tale. You find selfishness unacceptable, and therefor it is Ok — in your opinion — to crush the "selfish" into obedience by force of arms... That's moral?
You can. And you can have a white Mercedes 6xx in Thailand. But few people can afford them and therefor there aren't many...
Big enough to be comfortable. Until you've had a chance to compare 5 or more German showers to that many American ones, you wouldn't understand. And I have — perhaps, on this one you can just take my word...
The entire Europe (population over 700 mln) would not be able to resist a Russian (population under 150 mln) invasion... Because you don't spend enough money on equipment and training. And not just that, unfortunately...
Yeah? Russia's leaders — from Stalin to Putin — loved that line of reasoning among their would-be victims. There is a good reason they hate America most and foremost, without us you would've been as fluent in Russian as Czechs and Poles are...
In Soviet Washington the swamp drains you.
You have the freedom to leave, but choose not to. Why?
Learn to love Alaska
This seems a bad example. Jesus broke the Sabbath law - a law that was seen as exactly the same level of morality as "though shalt not steal". while he didn't say the government has an obligation, to the poor, he did accept that the government has the right to our money which would seem to contradict your earlier point., and he had absolutely no qualms about stealing a donkey for his own benefit, and was willing to destroy a whole herd of pigs to help another man. He also said that it is practically impossible for a rich man to enter the kingdom of heaven, so obviously he felt that wealth, or at least greed should be punished.
Many philosophers have argued against property being a natural right. Hume argues that there is no possession except that established by laws of society.
For the most part, Paul is paying voluntarily. And Peter is voluntarily accepting that Paul has the right to most of the money he's acquired. If either of these people break this social agreement then they are punished.
Yes. I consider murder as unacceptable as well. Also theft - as defined by society - to be unacceptable. Some people think you don't deserve your possessions. You are willing to crush these people with force of arms.
This is a bizarre means of measuring quality of life. How many people in Europe can't afford basic health care? How many people go without basic food?
The solution to this would be to increase taxation and spend it on the military. What would you propose, given that you apparently consider taxation to be a crime? Hell, the soviet union had a massive army and that was a society that essentially rejected the concept of private ownership!
And we have here a person, who insist on spending his whole time here preaching this society of people instead making money. Clear sign of being retarded. Unfortunately, it can't be healed and retarder person will be retarded till death.
Tell Govt to impose tax on company revenues, not profits.
Govt is imposing Income tax on your salary, not savings.
Casteism
Idiot, individuals don't exist. There are only societies of cells. Giving a smaller group of cells, this fictitious individual you're so obsessed with, more rights than a far larger group of cells, is slavery.
You can't spell "oneiromancy" without "roman".