…It actually not pays them in the US! ( 😕 !??)
http://www.theregister.co.uk/2013/01/17/amazon_fights_irs_international_tax_bill/

For example, if Amazon in the US were to buy packing boxes at 50p each and then sell them to Amazon UK at £1 each, that price comes off the UK subsidiary’s tax bill as an expense, saving the company as a whole some money. Obviously there has to be some change in the cost since the US is now shipping these boxes to Britain for Amazon UK’s use, but in grey areas, companies have been known to make some money.

Er Yes, and the profit would be atributable to the US operation…

This is pretty standard corporate inport/export stuff, but the article is written as though its something special.

Cycle to work anyone?

Anyone using BSkyB is paying for a large number of ‘advisers’ who work in tax havens and have daily charge out rates in the the thousands of pounds.

Until world taxation is harmonised companies will move revenue where it’ll make them the most profit.

Globalised business is well ahead of non globalised governments

No atempt to defend it morally which is good to see but it wont last 😉

Simply if you object dont buy their wares

Upset about the high street dont buy their wares

Etc

they do it becaus ewe still buy their shit then moan about them doing it

they only care about money so hit them the only place it hurts if you GAS

As for harmonised tax – look at the UK reaction when Europe suggests we get a grip on the city of london [secerecy and tax avoidance] and look at how many of our overseas territories are tax havens – we are not a small player in this industry
FWIW it hos Camerons dad made his money – legal tax avoidance schemes

if you think he will act then you have more faith than I do

We buy stuff from them because it’s cheaper than elsewhere and we think it’s saving us money.

People are still happy to pay cash to tradesmen to knock off the VAT so doubt many would be bothered about where amazon pay their taxes when on the hunt for a bargain.

I don’t think there are many out there who G enough of a S to pay more for their purchases.

I did cycle to work today, it was most pleasant if a little chilly.

Globalised business is well ahead of non globalised governments

Nail. Head.

Until governments can agree to create harmonized business tax structures (I’m not knowledgeable enough to know if its even possible) then the problem will continue.

Don’t forget though, “we’re all in this together”.

G4S runs the electronic tagging/curfew service for the UK government.
G4S (UK) buys the tagging equipment from G4S (cheap tax regime) at inflated prices. G4S (UK) then reports a loss/minimal profit in the country where the tax it isn’t paying funds this tax dodging exercise.

Simply if you object dont buy their wares

Upset about the high street dont buy their wares
Well, I do try to avoid being tagged with G4S products, but it’s the government (which finds tax avoidance so morally reprehensible) that awards the contract to the company who can do the job cheapest because they don’t get themselves saddled with any real tax burden..

Junkyard – Member
No atempt to defend it morally which is good to see but it wont last

Which is correct, because the moral argument is a red-herring!

Amazon is a perfect, contemporary model for illustrating the concept of taxation. Like any company it is merely an intermediary that provides goods and services. It is not an individual. The opportunity cost of paying tax includes lower wages (employees), higher prices (consumers) and/or lower returns (providers of capital).

Part of the success of Amazon and its apparent appeal to a global consumer base is that it understands and manages these opportunity costs to obvious benefit of its consumers. Hence its appeal to those who use it. But that is neither a moral nor an immoral act.

is amorality a moral argument?

Thats a much more interesting question!!

it understands and manages these opportunity costs to obvious benefit of its consumers

except it doesn’t does it. we all end up subsidising their profits by paying the tax that they won’t.

Which is correct, because the moral argument is a red-herring!

Sadly they all appear to be to you as far as economics is concerned as it apparently operates in an area where they dont need to consider such things as right and wrong.

Part of the success of Amazon and its apparent appeal to a global consumer base is that it understands and manages these opportunity costs to obvious benefit of its consumers

some flowery language to say that amazon sells stuff cheaper than anyone else because they dont pay tax.
The obvious benefit is only there if all you value is the [lowest]price- which is true of many/most.

For example
Folk will use amazon then moan about the state of the high street

They will use amazon and then moan about tax increase – those high street business closing paid a lot of tax

i think if you asked folk if amazon should pay tax fairly on what it sold here the answer would ebe a resounding yes

If you asked the same people if they wanted to pay higher prices to amazon the answer would be no

The fault of the ability for companies to avoid tax as compared to dodging tax sits completely with government. It is their job to monitor society and then change the laws. When international trade direct to consumers started to increase the tax laws should have changed. It is their slow response that is shameful. Why would any US company want to pay tax in the UK.

European and US countries have banned internet gambling so why not ban or restrict cross boarder internet sales or insist that a company must have a UK arm that the sale actually goes through.

Simply if you object dont buy their wares

The very reason I no longer go into Starbucks….

We buy stuff from them because it’s cheaper than elsewhere and we think it’s saving us money.

+1

And then we complain when shops like HMV et al that pay their taxes to the UK close down.

The very reason I no longer go into Starbucks….

People are very selective about their objections. I wonder how many people slagging off Starbucks/Amazon were doing it on their Macs/iProducts…

I would also like to see Amazon pay a higher rate of tax, but that is not a moral argument.

Out of interest what is a morally “fair” amount of tax? So the high street store paying more out in tax to the opportunity cost of either their employees, customers of shareholders is acting morally? No, that is another red herring. But it does make for an emotive headline.

Perhaps the real moral question rests with us as the consumer? On that basis, it would seem that the many consumers are behaving very immorally. Blimey, I bought something from Nike the other day!

But JY as for the initial (incorrect) accusation, that is one of the reasons why I think economics is best studied in conjunction with philosophy as the latter is better suited to helping us ask, “what is the right thing to do,” than the former IMO.

I would also like to see Amazon pay a higher rate of tax, but that is not a moral argument.

Give your a compass a tap will you it seems broken 😉

Perhaps my edit (x-post) helps to explain!

HMV et al that pay their taxes to the UK

To pay tax you have to make a profit!

…which is a mild inconvenience for some!!!

To pay tax you have to make a profit!

But this is how companies like Starbucks get away with it. Because some very clever accounting means they don’t make any profit in the UK.

I take you point about HMV. They don’t need clever accontants not to make a profit.

Short memories for some, HMV are being treated like a paragon of tax paying, they gave the channel islands a go for a while too HMV.

We buy stuff from them because it’s cheaper than elsewhere and we think it’s saving us money.

The cheapest place for the laptop I bought recently was John Lewis.

Apparently Amazon’s pricing model is like a supermarket which discounts its bread and milk to get you into the store – i.e. top ten books or DVDs are very cheap, but other stuff is less so.

UK PLC’s tax offices are owned and operated by a Holding co that is based in a tax haven.

So why would anyone else be any more honest about volunteering to pay tax?

See JK rowling for an example of someone not doing this

I think the problem is thar the vast majority of us have little choice in whether we pay tax as they take it at source via PAYE
Even those with accountants can decide how far they wish to go

It grates to see multi million and multi billion pound companies and individuals taking the piss with the rules

It grates to see multi million and multi billion pound companies and individuals taking the piss with the rules

HMRC reckoned aggresive tax minimisation by big multinationals and the super rich accounted for about 1/4 of the “Tax Gap” and that 1/2 of the tax gap came from strategies by smaller businesses. Not necessarily big dodges – but there are just an awful lot more small businesses. (they didn’t say where the other 1/4 was coming from.

Noticed how popular these have become in the last few years? This is pretty much a device that is wholly conceived as a tax minimisation scheme, with wheels.

Unless you’re PAYE and you buy one in which case you’re just a bit of a fud 🙂

Next time a thread discussing minimising import taxes comes up on here I must remember to point out that everybody on it is worse than Amazon, Starbucks etc. (because what they are doing is legal). I presume nobody on here complaining about large companies avoiding tax has ever considered bringing back a frame from the US and “forgetting” to mention it to customs?

I must remember to point out that everybody on it is worse than Amazon, Starbucks etc. (because what they are doing is legal).

Not sure using the law as your basis for right is that wise an idea tbh

Surely it would simply depend on where you are ?

Carry a gun – depends where you are
etc
IMHO both your examples are equally wrong though one is legal and one is not.