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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."
Paraphrasing John Gilmore:Corporations interpret taxation as damage and route around it.
In Soviet Washington the swamp drains you.
Cool, the people involved in this are going before a jury, right? ...right?
No.
And it's worth noting that Apple and Microsoft do the same thing, but because they're paying Slashdot, we're being set onto one of their competitors instead, like the baying pack of dogs we are.
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.
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)
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
Just Fucking Google It.
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.'"
Cool, the people involved in this are going before a jury, right? ...right?
Whoah there. Corporations are only people when it's in their benefit.
They're just playing the game that's being played, they all do it. For example: Apple's Tax Strategy
No, much of their local competition in book sales etc (not being international companies with multiple subsidiaries in the EU) are not doing this. Apple etc's competitors are generally multinationals who also play these tricks. But in many cases Amazon's are not, and the effects of tax abuse are that much more problematic as they don't only affect tax revenue but also distort the market.
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.
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?
I stopped using Amazon a few years ago when the tax avoidance became evident. Same goes for Google, Apple, Microsoft, Starbucks, Cafe Nero. As tax avoiders get known, they are removed my my list of places to buy.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Check the trouble Ireland is in for this with Apple
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
eh? fairness? People have to pay taxes, so should companies!
Thank you, Bradley Manning, Edward Snowden and so many others, for courageously defending humanity, my freedom and more!
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!
True, that's the taxes citizens pay. And european get a better government in return.
Thank you, Bradley Manning, Edward Snowden and so many others, for courageously defending humanity, my freedom and more!
European governments could do this today...
Thank you, Bradley Manning, Edward Snowden and so many others, for courageously defending humanity, my freedom and more!
"There will always be tax loopholes" No that's the result of politics, it could easily change.
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.
What makes you think that companies don't want and lobby for this complex tax code that is full of loopholes they can explot?
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
It's not just multi-nationals. I do it as well, for my personal consulting. HK is a great, low-tax/no-tax jurisdiction as well, and just $1500 can get you set up there.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
There is a big difference between an allowance and a loophole; where you are allowed to write down xyx against your tax bill, that is an intended tax allowance by your tax authority, put in play for whatever reason - balancing the tax system, encouraging certain types of spending, buying votes, etc. Such allowances are all part of making sure everyone pays a fair amount of tax, and everyone ultimately benefits.
A loophole however is not intended; a loophole is legal only because governments have not figured out how to close it. Clearly Amazon is expected to pay some tax on its non-US earnings, and it's not. This is not in any way the intent of the governments of the countries in which Amazon operates. Taking advantage of such loopholes benefits nobody except Amazon; taxpayers in the countries that Amazon operates in are deprived of tax revenue that would benefit them directly, and local competitors to Amazon who do pay their taxes are squeezed and put out of business, ultimately again to the detriment of everyone except Amazon.
Oh no... it's the future.
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.
Loopholes are only the tip of the iceburg. Even if you attempted to remove all the loopholes, you would still
be sunk as a large multinational basically has the ability to write it's own loopholes. It also has other tricks
that individuals don't have like telling random country X that they will move 30million dollars to their country
if they give them below market taxes. Walmart and factories do this all the time where they will get 5 years
where they don't have to pay any sales tax for building a new store. Amazon, Apple, Microsoft, etc... are
just doing it on the national instead of the local level. The only way I see of fixing this (instead of playing
whack a mole) is to tax them based on sales and employment in the countries. i.e. if starbucks is selling
their coffee in the USA (which they obviously are) then their profits have to be in the USA too and to do this
you need to either figure out a way to treat all the shell companies that places like starbucks create as a
single entity or tax them in a way that shell companies don't create an advantage.
Actually prices from amazon in Europe follow the convention where they are shown inclusive of any VAT (unlike the US where prices are exclusive and sales tax is added afterwards). For goods VAT is charged at the rate for the country of destination. For eCommerce the wrinkle is that they are charged at the rate for the country of supply (i.e. where the supplier is based)... for most companies they choose Luxembourg as the VAT rate is lower than elsewhere... this changes next year as it will be VAT for the country of destination, and so Luxembourg is about to take a 1 billion EUR hit and is having a slight panic over the revenue loss and is having to tighten its belt (which is unusual and causing all sorts of issues, and somebody is probably kicking themselves over only taking 1% instead of more). So the VAT does go to the country of destination... except for eCommerce (county of supply, changing to country of supply next year).
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.
when companies pay those taxes do you really think they pay it? or do you think they pass those taxes along to us?
Its better for the individual if corps pay little or no tax as it keeps the cost of goods down
have you seen my sig? there are many others like it but none that are the same
Taking advantage of such loopholes benefits nobody except Amazon;
it keeps the cost down for the buyers, as such its not only just helping amazon its helping us because if you really think amazon is going to eat a 30% tax and not charge us more i got this here bridge to sell ya
have you seen my sig? there are many others like it but none that are the same
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.
Yes the pass the taxes along to the consumers ... in a market where most stores has to charge taxes for one reason or another, to have a store that doesn't creates unfair competition.
The law needs to be changed one way or the other but a change is needed.
This is also the labor issue and many other ones that come to light with global presence
dont disagree with that at all, we should lower the corp tax rates around the board, we already have the highest corp tax rate in the world which is driving companies out of the country.
have you seen my sig? there are many others like it but none that are the same
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.
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.
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!
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".