Anorak | Those tax dodging swine at Amazon!

Those tax dodging swine at Amazon!

by | 8th, February 2013

GRRR! Amazon! Coming over here, making vast sales, and not a penny of tax do we see out of them. Or something like that. You know, all they’re doing is providing people with what they want, cheap, and where’s the public value in that?

Unfortunately the Guardian seems to be running their corporate tax pieces on boilerplate language these days. For they tell us that Amazon doesn’t pay tax because :

Amazon’s mounting reserves are likely to fuel demands for reform of UK tax laws. The retailer generates an estimated 10% of its worldwide revenues here, but paid just £2.3m in tax in the most recent three years for which figures are known.

The company’s cash savings ballooned from $3bn at the beginning of the quarter to $8bn by 31 December, boosted by a £3bn fundraising in November. Money held in short term investments increased to $3.4bn.

Like other US technology companies, Amazon has put this money out of reach of the tax authorities by managing its European operations from Luxembourg. Profits collected in the UK and other major markets are funnelled out via a network of subsidiaries, in the form of royalty payments for intangibles such as use of the brand or technology developed inhouse.

Whatever Amazon’s doing in Luxembourg makes no difference to how much UK tax it does or should pay. The reason it pays almost nothing in the UK is that the law says that it should pay almost nothing here.

When you buy you buy from Luxembourg. So the taxs, whatever it is, is collected in Luxembourg. It gets shipped to you from a UK warehouse, yes. But that doesn’t make tax payable in the UK. For here’s the international treaty we have with Luxembourg :

(3) The term `permanent establishment` shall not be deemed to include:

(a) the use of facilities solely for the

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Posted: 8th, February 2013 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink