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That's populist propaganda. Businesses are taxed on profit, not revenue. Even if they were 100% based in the UK, they'd still probably pay very low corporate ta
by snoonan 13y ago
That's populist propaganda. Businesses are taxed on profit, not revenue. Even if they were 100% based in the UK, they'd still probably pay very low corporate taxes (if any) due to the thin margin. They actually do pay an enormous amount of tax in the UK in the form of payroll taxes, VAT collections, etc.
It's sad to see people propagate this crap. It's really about veiled protectionism. A big, efficient player comes in and is willing to forego profit indefinitely. Can't tax them legally, so shame them. Tax on 0 is 0. That's how it works for UK companies too. Try reading between the lines...
- sudomal 13y agoThen why is Luxembourg such a magnet? It's not just Amazon, companies that exclusively cater for the UK market moved their base there.
- Consultant32452 13y agoLuxembourg is a magnet because the UK government is stupid and creates taxes that are easily avoidable.
- newaccountfool 13y agoExactly my point, if Amazon are making little now through tax loopholes what happens when they are fixed.
- icebraining 13y agoHow is it a "loophole"?
- newaccountfool 13y agoAmazon runs a business in the UK, they are owned by a parent company in Luxembourg that they pay the majority of all their revenue to, thus making almost no profit, thus paying very little in tax. They run a business in the UK but pay almost nothing in tax, it should be fixed its not fair on small business owners who have to pay all of there tax and get hammered for it. Can you not see how its a loop hole? It can so easily be fixed.
- SpikeGronim 13y agoYeah, the reason AMZN doesn't pay UK tax is NOT because they are not profitable. It is because they legally avoid taxes by basing all their EU operations out of Luxemburg. Tax codes need reform world-wide to avoid this kind of bad behavior.
- icebraining 13y agoSo if Etsy sells something to Portugal, should you pay Portuguese corporate taxes? I'm sure we won't mind the income ;)
- newaccountfool 13y agoThat's different Amazon actually has property in the UK, large warehouses, staff among other things.
- icebraining 13y agoEtsy also ships physical things, the only difference is that they subcontract to a delivery company, who obviously doesn't pay taxes over Etsy's profits. But actually, it's not different, because Amazon also subcontracts, the only difference is that the subcontracted delivery company is named... Amazon. So what they're doing is the same as any companies that ships products to the UK, except that they happen to own both companies and they have similar names. I fail to see the reason why should Amazon UK pay for the profits earned by Amazon Luxembourg, when DHL or whoever don't pay for Etsy's profits that come from the UK.
- newaccountfool 13y agoShall we remove all there distribution centres then? Since they can just have a global warehouse in Luxembourg? Since they don't need them.
- icebraining 13y agoRevenue sent to a parent company abroad is deducted as an expense? I find that hard to believe. According to this article[1], what they actually do is send the payments directly to the Luxembourg company, and Amazon UK is just classified as a delivery company. That makes sense, and frankly, it doesn't shock me. I'm from Portugal and I just bought some comics from an US company. Should they start paying Portuguese corporate taxes?
- newaccountfool 13y agoI mean they don't pay corporation tax, they're based in Luxembourg for that reason. Why should I have to pay a ridiculous amount of money, when they don't pay anything.
- snoonan 13y agoThey pay corp tax on the profit they earn in their UK's operations. Just like every other company with operations in the UK. What percentage of your revenue do you pay in corporate taxes? None! You only pay a percentage of profit. (extremely thin for Amazon) They base in Luxembourg to benefit from UK laws and EU regulation. The UK media and government quoting billions in revenue is meaningless. They're trying to stir you up. They would relatively nothing in corp tax relative to their other tax footprint (payroll, vat, etc) and would absolutely spend it all to avoid doing so.