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Amazon and Starbucks pay less tax than sausage stall, says Austria
- jkot 10y agoDoes amazon even have a presence in austria? I thought it is handled from other countries.
- hackerboos 10y agoSearching for Amazon Austria brings up Amazon Germany's website, that site also serves the Dutch it seems.
- dwightgunning 10y agoCorrect. I'm in Amsterdam and bought from amazon.de last night. I'll usually compare with amazon.co.uk for price and occasionally pay more because the supplier won't ship internationally. There are plenty of Dutch online retailers (e.g. bol.com and coolblue.nl) but their prices are significantly higher (even factoring the slight difference in VAT). Considering we're supposed to be in a "single market", I've never been able to figure out why that is.
- throwaway13337 10y agoLiving in Austria right now, I know two Austrians out of the like five I know well that have amazon prime. I only know about it from those people because they order so much on amazon. They may be using amazon.de, but so are most central euro countries. In Denmark, people generally either buy from .de or .co.uk. Certainly people order less from amazon than in the states, but the presence is still pretty huge.
- ersii 10y agoI think the Original Poster that you're responding to mean presence literally, as the word is usually used. As in "Does Amazon have any facilities/staff etc in Austria?".
- germanier 10y agoThey don't. Orders are handed over to their couriers abroad or transported by truck from Germany to the Austrian post at Allhaming.
- 4ad 10y agoNot true. I live in Vienna, and I order a few orders from amazon every day. Last year I had over 600 amazon.de orders. Generally I try to order only Prime stuff. The vast majority of orders (over 90%) come from Salzburg, Austria, although in a few occasions I even had same day shipping, those came from somewhere even closer.
- germanier 10y agoThey don't have any warehouse in Austria. This page has as far as I know the location of all their warehouses: http://www.mwpvl.com/html/amazon_com.html http://www.mwpvl.com/html/amazon_com.html The location printed on the label is the place they hand over the package (trucked from somewhere). I'm a bit surprised they seem to do that in such a volume in Salzburg. Previously they mostly used Allhaming (usually called Linz on packages). For example, most my packages in Germany are labelled "Radefeld - Direct" but they originate from Poland or the Czech Republic, not the Amazon logistics center near that. They also print a return address on the labels which is often another place distinct from outbound delivery (mostly Graben for me). Amazon uses multiple locations to accept packages and forward them to their warehouses. I don't know anything about their same-day logistics though. It's the first time I hear that for Austrian addresses and no mention on their homepage, too.
- poopsintub 10y agoMultiple conflicting people about where their packages are coming from? What's the chance there is a wharehouse but they can't list it for obvious tax purposes. They might be subcontracting to another company?
- hga 10y agoPart of this makes an intuitive sense, a sausage stall has one trivially accessible "throat to choke", whereas Austria's access to e.g. Jeff Bezos is much more difficult. Starbucks, though, I'm assuming they've got retail shops in Austria? That just means they can afford better tax lawyers.
- mschwaig 10y agoBeing able to pay tax lawyers that are so great that you basically don't have to pay taxes kind of breaks the concept of taxation though.
- daniel-levin 10y agoROI(tax lawyers) > taxes to pay without them.
- charlesdm 10y agoThe int'l tax system summed up. It's that simple.
- hga 10y agoOr this is a establishment politician with a weak hold on power who has not necessarily got his facts right, or if he's talking about absolute numbers vs. rates is probably lying through his teeth, but knows bashing foreign companies is a crowd pleaser. And maybe they overtax those sausage stalls, lots of/most every? country has tax regimes with lots of insanity. Apple wouldn't be playing the games it plays with the US if we didn't have the 2nd highest or so corporate tax rate in the world (e.g. see https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates when you factor in state tax rates only Cameroon is perhaps higher). While I was doing the search for that, I noted that as a region Europe has the lowest, but that's no doubt not accounting for VATs, which the US is allergic to, at least unless one of the big other categories of taxes is totally killed off (like, with a "this time we mean it" Constitutional amendment). Anyway, my point is that all this results in all sorts of distortions. For example, when the Reagan individual tax rate cuts kicked in, I noticed my parent's business and investing strategies change as tax avoidance became much less important. In his working lifetime, the top rates went from 91% ("We Like Ike???") to 70% (which as I recall was split between 50% or more for "earned" and 70% or more for "unearned" (investment) income), to 38.5%, to 28%, before it started going up again (even the George W Bush tax rate cuts only dropped them 4.6% to 35%). And going back to the distortions, the family exemptions allowed a normal family prior to JFK's 1964 supply side rate cuts to survive with the lowest bracket being 20%; those weren't adjusted for inflation until Reagan's reforms, which turned them into a pretty minor thing with how inflation savaged the dollar during that long period (the CPI peaked at like 13-14% around the time Reagan entered the Oval Office).
- sloxy 10y agoGuess he forgot about the point of the EU’s single market.
- heisenbit 10y agoTax heavens like law breakers may have critical roles in a stable system allowing it to adapt. But one can not let them run the show as a whole. International trade is not a new problem. Car manufacturing has been internationally for a while. Rules for transfer pricing have been established. The challenge is with this construct of intellectual property where arbitrary valuations disconnected from any underlying real trade are easier to get away with. It used to matter less. It matters more now and tax innovations are getting more scrutinized.
- j_m_b 10y agoWhy do we even tax corporations instead of just the income that its owners receive from the corporation?
- dogma1138 10y agoNever understood that either, it always seemed to be a double taxation scheme to me. A corporation has effectively only a few things to do with their revenue which are or can be directly taxed more effectively. It can hire more people, or pay it's employees more, which means that money is taxed as income. It can invest the money directly which means that return on that investment can be taxed as capital gains. It can pay out dividends to it's shareholders which means that this money can again be taxed directly as capital gains. It can invest that money internally to expand which again can be taxed at various levels, sales tax, income tax, property tax etc.
- rayiner 10y ago> Never understood that either, it always seemed to be a double taxation scheme to me. Corporations are legal persons, and income accruing to distinct legal persons is subject to tax. E.g. I get paid by my employer, and then pay tax on that. Then I pay my nanny with post-tax dollars, and she pays tax on that. That's not "double taxation"--just the nature of an income tax. Imagine that instead of forming a corporation, a bunch of investors nominated Bob to be the legal entity in charge of the whole business. Bob held all the bank accounts, directly employed everyone, and booked all revenue minus his expenses as his income. A series of contractual arrangements required Bob to pay out the profits to the investors. Under that circumstance, there would be no doubt that profits would be taxed when they initially accrued to Bob, then again when he paid the investors. It should be noted that nothing precludes companies from organizing as something other than a corporation. Partnership income, for example, is only taxed when it is received by a partner.
- marktheknife 10y agoI'm going to quibble a bit, hopefully not in an annoying fashion. The distinction is that the tax system does not give a deduction to individuals who are spending their money on personal "consumptive" reasons. By and large, the system does give deductions for expenses incurred for business. In this light, the double taxation of corporations is unusual. Clearly, the dividends are to pay back investors, just as interest is part of paying back lenders. But interest is deductible; why not dividends? Many theories have been advanced to justify this double tax, but none have won wide support among scholars. (Interestingly, in your example, what probably would happen is that Bob would essentially be the effective managing partner of a general partnership. So we would be under partnership tax rules.) A last quibble: partnership tax actually taxes partners even while the income is held by the partnership. (Well, generally; there apparently are some odd trust schemes that sort of avoid this.) in general, Partnerships must allocate the income to the partners, who bear the burden of tax. Then, they must later distribute the income in accord with how they've allocated it.
- skafjvhs 10y agoSomething about this story seems off to me. >Mr Kern, who heads Austria's Social Democrats and the country's coalition government, also said Facebook and Google had sales of more than 100m euros each in Austria. I'm not an expert on Austria but this suggests to me that this person can propose and possibly pass laws in Austria. He is not just an activist who only has the power to give interviews to BBC. If he thinks that Amazon and Starbucks are not paying enough tax to Austria, why doesn't he change Austrian law to charge them more tax? Don't give me some bullshit about how corporate lawyers will find loopholes - you run the government! Do your job! Change the law! Or at least make a show of trying.
- peletiah 10y agoKern only came into power in May, the social-democrats (SPÖ) have been in a "great coalition" with christian-democrats (ÖVP) since 2007. This coalition has been on rickety legs for many years now and there's not much the two parties agree on. There have been no noteworthy reforms for a decade. There's also the threat of the populist far-right FPÖ, which has been gaining power again after two failed coalitions with the ÖVP 15 years ago (The FPÖ have been polling at ~30% for several months now, which is the largest approval of all parties). Several members of the ÖVP-government and regional bodies are actively working against the great coalition and undermining the head of the ÖVP, sympathising with going back in a coalition with the fascists. For all these reasons, Bundeskanzler Kern is not as powerful in legislature as would be desireable. Also I understand his remark as suggestion for a discussion and possibly a proposal for an EU-wide discussion on unifying tax laws. And he's probably fishing for votes with public statements on popular topics. Personally I think he's the most promising Bundeskanzler we had in a long time, as he's an intellectual and is charismatic enough to potentially neutralize the threat of a far-right government.
- skafjvhs 10y agoThanks for the context, it's very useful. From a US perspective, it's common for our top politicians, when talking about a problem, to present a specific proposal for legislation they would use to fix the problem. It makes their words more credible to me. It is easy to complain that things are bad, harder to describe in detail how things could be better. To be cynical, these plans are written by staffers and the politician may just memorize the key points. But it at least demonstrates there is some commitment to the issue.
- davidf18 10y agoAmazon and Starbucks spend a lot of money to hire highly competent tax attorneys and other staff to minimize their payment of taxes. Instead of complaining, countries need to pay more money to hire even brighter people to write better tax laws. Citizens of these countries need to elect officials who will do the hiring and not have obstructive laws that prohibits the payment of the large salaries and fees necessary to hire these competent people.
- greyman 10y agoBut what can you do if countries like Ireland or Malta just allows tax evasion?
- gozur88 10y agoThis was always the Achilles heel of the EU. In the end it can't work unless tax policies are harmonized.
- lhopki01 10y agoThe way the US won't work unless tax policies are harmonised between states.....oh wait.
- gozur88 10y agoOh wait. The difference is there's no EU-wide corporate tax, whereas US federal corporate taxes are relatively large compared to the state levies. So there's a much larger incentive for companies to seek out EU states that are willing to undercut their neighbors.
- davidf18 10y agoWell, you can threaten to throw them out of the EU if they don't fix their unfair (to other member countries) laws. The EU should have more statutory authority for laws like this just as in the case of the US Federal Government over State governments. At any rate, don't blame Amazon, Starbucks, but rather blame wealthy governments that refuse to spend the money for talent that can fix the laws (or iteratively "refix" them).
- readittwice 10y agoHi, I am Austrian and I read the original interview in an austrian newspaper. It was very unspectacular and I am quite amused that it got international attention. Our prime minister is wrong or at least slightly populist here. Yeah, Facebook/Google are not paying advertising duty. But no one does, at least in the internet. You only have to pay this duty if you advertise in TV, Radio, newspaper, etc. but it does NOT apply for the internet! See for yourself on the homepage of the austrian finance ministry (unfortunately in german): https://www.bmf.gv.at/steuern/a-z/Werbeabgabe.html https://www.bmf.gv.at/steuern/a-z/Werbeabgabe.html. The law is from 2000, so probably before advertising in the internet became big. Even if they change this law to include the internet, the Austrian companies that want to advertise would have to pay this tax (5% btw) since Google/Facebook do not have any offices in Austria (see chapter "Abgabenschuldner" in the link above). Google/Facebook don't even need to care about this law! (apart from that extending the law could make advertising in the internet more unattractive). Why should they even pay corporate taxes in Austria? As already said they don't have any offices here.
- zaidf 10y agoThe smaller you are as a business, the closer you are to being an individual and less of a business. Of course, as an individual, basically any money you earn is taxed. You don't get to not pay tax on the $1,500/mo rent for your apartment where as as a business, you can deduct your offic rent.
- SixSigma 10y agoYou need to ask EU president Junkers about that, though he has the corrupt politician's memory lapse in the face of evidence. http://www.telegraph.co.uk/news/worldnews/europe/eu/11902939/EUs-Juncker-releases-secret-Luxleaks-tax-advice.html http://www.telegraph.co.uk/news/worldnews/europe/eu/11902939...