As the Guardian reports, Amazon is going to pay UK tax:
Amazon has become the first technology company to abandon controversial corporate structures that divert sales and profits away from UK in the face of a clampdown imposed by George Osborne.
George Osborne is going to claim this is because of his Diverted Profits Tax.
I argue it is because of EU investigations and the OECD's BEPS programme.
And the truth is we will never know for sure.
But what we can say is that this would not have happened without:
- The tax justice movement
- UK Uncut
- Union backed campaigns
- Margaret Hodge
- Investigative journalism
Those are certain. We should celebrate this as a victory whilst still noting that:
- We still need a proper general anti-avoidance principle to beat this type of abuse for good, because that would be much better than the diverted profits tax
- Full country-by-country reporting on public record
- The completion and implementation of the BEPS project
- Total reform of corporation tax internationally, including a unitary tax base
But for now let's just note that Amazon said it could not sell to UK customers from a UK company. That, it said, was logistically impossible. Oddly that does not now seem to be the case. I think everything Margaret Hodge said about the behaviour of these companies has been justified.
And those who defended them should be hanging their heads in shame.
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Amazon reported a loss of usd 400 million on overseas sales 2014 (FT). Nothing is as sad as a loss ending in a tax haven. Let us do some business restructuring!
Suspect you are on to something there.
Make the UK operation a true “entrepreneur” in transfer pricing speak and it can claim its fair share of the losses. Carry forward those losses and Bob’s your uncle, no UK tax to pay on future profits.
Can always restructure in the future once the heat has passed.
Imposed ‘by’ George Osborne.
The Guardian is unduly generous: ‘despite’ would surely be a better word.
This is a success and a victory for Britain: it represents a defeat and a failure of the key Neoliberal policy of latter-day Conservatism.
But do, please, congratulate George Osborne and his colleagues, and be as as fulsome as you may: I take pleasure in the sight of them pantomining gratitude and modestly accepting all the praise, and grinding their teeth.
I noticed recently that Amazon are not so competitive in their pricing anymore. I used to be able to get free postage with almost any order. It crept up to needing to be £10 or more and now it has crept up to mostly being £20 or more. Because this makes it less cost effective for me I am buying more things locally or from UK based retailers or from small sellers (including on ebay). Perhaps this will bring more competition to the market now that Amazon doesn’t have the tax advantages anymore?
It’s designed to make you buy Amazon prime
Amazon with a FAIR TAX MARK?
Is it a dream or a fantasy?
Next we will be hearing that they are paying their staff properly!
I think they have a long way to go for that
Maybe I’m too cynical, but the Amazon statement only talks about recording sales in the UK. It’s the Guardian that extrapolates this and interprets it as also meaning more profits will be recorded in the UK.
Clearly the UK will have to but the goods from somewhere and the price it buys those goods at will not necessarily mean they start making a huge profit in the UK. My guess is Amazon UK will buy the goods from another Amazon company — perhaps Amazon Luxembourg — so the price will be whatever transfer price is deemed/considered appropriate and/or acceptable by the various tax authorities under current OECD principles.
So don’t get your hope up too much!
I am not expecting anything
I list all the issues still to be addressed
For a start, a branch will not record its activities on public record so we won’t even know if tax is paid
Best guess is that their numbers are pointing towards an operating loss, and they do not want that to end up in a zero tax jurisdiction. At the same time they can show how they have changed their practices, booking income where everybody said it belonged. Having the cake and eat it.
We will never see the accounts to prove they are paying tax