Anorak News | How can we tax Amazon’s Profits if Amazon doesn’t make any profits?

How can we tax Amazon’s Profits if Amazon doesn’t make any profits?

by | 7th, August 2013

File photo dated 26/04/13 of the Amazon logo on a package as the online retail giant has broken advertising regulations with a description of a book promoting a vaccination-free childhood, the regulator has ruled.

YOU’LL have seen all the furore about how Amazon are such bastards for not paying any taxes on their vast profits made by selling us stuff for cheap. You know, there’s shouts from the supermarkets that there should be a special, extra, tax on those who sell online. About how appalling it is that Amazon has all these warehouses here and yet sells to us from Luxembourg: thus paying no UK tax.

They’re even talking about completely changing the international tax system just to make sure that amazon does indeed pay taxes in the UK. And Germany, France…..there’s only really one basic problem with this idea:

The company reported a net loss of $7m (£4.5m) in the quarter to June 30, compared with a profit of $7m a year earlier, as revenues grew to $15.7bn. The world’s largest online retailer has been spending heavily on order fulfilment and digital content rights, which continue to weigh on margins.

You see, we don’t charge a company taxes on its sales. That’s VAT and that’s paid by the customers. No, we charge a company tax on its profits. And if it’s not making profits then there’s no tax for it to be paying. Which is something of a problem really as if Amazon’s not paying any tax because it makes no profits then there’s no point in trying to change the international tax system, is there? Because even if the tax system is changed so that sales from Luxembourg to England are paying tax in England, if there’s no profit there still won’t be any tax.

In other words, all this paranoia and shouting about the tax system is nonsense: there ain’t no profits to tax which is why Amazon isn’t paying any tax.

Posted: 7th, August 2013 | In: Money Comments (2) | TrackBack | Permalink