In the last few days the question has been raised as to how a company can be accused of tax avoidance when it appears to be paying tax. This is my quick take on a response.
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Surely if Amazon’s regional offices were permanent establishments they would be subject to tax in the UK.
Yes
But they go to great lengths to avoid that
Not great lengths, no. It’s there in the standard double taxation treaties. Warehouses and logistics chains do not lead to the creation of a permanent establishment.
It’s not even a choice. They simply don’t.
Tim
That is such a crass comment it’s absurd.
First, they do have a choice, and have made one. They could sell here from the warehouses and head office they run here.
Second, no one but a fool thinks Amazon is not abusing the concept of permanent establishment – from the EU on
Third, you are arguing the law is a moral arbiter. Dangerous ground
Fourth, as ever, you show yourself to be wilfully blind to the truth
Richard
There seems to be two separate arguments here…..
First that the setup of the company is designed for tax avoidance and therefore needs stopping even if the actual numbers do not show a tax saving.
Second that just because Amazon has paid tax this year does not mean it will pay next year, this is essentially a one off.
I have a problem with both these arguments:-
For the first one we have to have a negative result for there to be something that needs resolving by the law. If someone shouts racist abuse at the TV but no one hears…..it is not against the law…….if someone shouts racist abuse at a person then because they suffered we have the crime of racist abuse that needs the law to step in.
In the same way Amazon designing its affairs to POTENTIALLY avoid tax is not and should not be against the law unless there is damage (tax lost) to the UK.
For the second argument how many years of actual tax paid meeting expectations are required?…..you obviously claim this is a one off but what happens if the tax paid meets the required amount next year and the year after? How long can you attack a structure for tax avoidance if after years in action it avoids no tax?