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."

Comments

What was quote about Internet and censorship?

[mi]

Paraphrasing John Gilmore:Corporations interpret taxation as damage and route around it.

Re:What was quote about Internet and censorship?

[roman_mir]

The rising tide lifts all boats, you are completely confused as to what a tide is, just like vast majority of the economically challenged. It is not consumption by a billionaire or anybody for that matter that 'lifts all boats', it is production by the said billionaire, and production in case of a billionaire comes in the form of savings - the capital that does the work. It is savings, investments, production that lifts all boats, because only savings, investments and production create new / better / cheaper products and services that the poor can enjoy, while in the beginning all products and services can only be enjoyed by a very few select wealthy individuals. I am quite certain I just went way over your head though, you will need much more to understand why savings are crucial to investments and production and thus to the lifting of all boats, I will not spend more time on that here.

Variable taxes = discrimination and inequality under law and leads to destruction of individual freedoms by giving the government power that it must never have: the power to discriminate and apply laws judiciously rather than procedurally, in other words with 'progressive taxes' you create society that is ruled by men, not by laws, you push towards socialism/fascism and that is exactly what you get instead of prosperity, which requires equality under law, free market capitalism.

As to police, courts, roads, education, health, energy and whatever else you may think of that has government hands in it, none of it belongs to or in government at all, all of these are normal goods and services that should not be regulated or taxed or licensed (monopolised) in any way by government structures, but again, way over your head.

Tax collection for hire

[putaro]

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.

Re:jury

[disambiguated]

They're just playing the game that's being played, they all do it. For example: Apple's Tax Strategy
They'd be incompetent if they didn't. You can order your own tax sandwich here (pdf)