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Amazon Decides To Start Paying Tax In the UK 243

Mark Wilson sends word that Amazon will begin paying corporate taxes on profits made in the UK. The company had previously been recording most of its UK sales as being in Luxembourg, which let them avoid the higher taxes in the UK. But at the end of last year, UK regulators decided they were losing too much tax revenue because of this practice, so they began implementing legislation that would impose a 25% tax on corporations routing their profits elsewhere. Amazon is the first large corporation to make the change, and it's expected to put pressure on Google, Microsoft, Apple, and others to do the same.
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Amazon Decides To Start Paying Tax In the UK

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  • by penguinoid ( 724646 ) on Saturday May 23, 2015 @11:42PM (#49761667) Homepage Journal

    The UK decided that Amazon will start paying tax in the UK.

    • Actually, I think this move has got nothing do with the UK specifically. It's to do with the EU VAT changes that make Luxembourg no longer advantageous to sell from. Those changes came at grievous cost to small businesses but the EU doesn't seem to care.

      Anyway. This whole thing is bad news. The UK is currently trying to throw the idea of tax law in the bin by passing stuff like the "General Anti Avoidance Rule", which literally says anything the government doesn't like is illegal (retroactively), i.e. it's

  • by mikeabbott420 ( 744514 ) on Saturday May 23, 2015 @11:50PM (#49761701) Journal
    Amazon has historically reinvested almost everything in expansion. Try and get some cash out of companies like Apple that actually generate huge profits for their shareholders and then it might be interesting to see what happens.
    • Amazon in the US tends to do the investment in R&D. How much does it do in the UK? From the sounds of it not much. It doesn't matter how much R&D it does in the US Amazon UK can't write it off. Maybe there's some way they could "offshore" those expenses and send the money to the US. So if Amazon wants to do project X then they would get Amazon UK to fund it and they could expense it even though the work could be done in the US.

  • by Mal-2 ( 675116 ) on Sunday May 24, 2015 @01:29AM (#49762007) Homepage Journal

    Each company will do exactly the same calculation Amazon has done, and figure out which method of accounting allows them to keep the most money while remaining able to operate in the jurisdictions they care about. If the others come to the same conclusion, it's not because Amazon said so, it's because the numbers and the lawyers said so.

  • by high_rolla ( 1068540 ) on Sunday May 24, 2015 @03:20AM (#49762227) Homepage

    I live in Australia and I would like to see us go down a similar path.

    If the UK proves it works I really hope it spreads elsewhere and also leads to the end of the massive profits these companies are amassing. I'm sure there profits will still be quite sizable but this should make it a bit more reasonable. I'm not an economist so correct me if I'm wrong here but it seems many countries are not in the best of financial states at the moment and each of these corporations taking $billions each quarter out of economies without realistically contributing back is a contributing factor in this? If this type of taxing spreads globally it could be a big factor (amongst several others) in getting economies back on track?

    • by xelah ( 176252 )

      All taxes are ultimately paid by people....maybe shareholders, or employees, or customers, but always people even if via a corporate proxy. For corporate taxes it seems to be employees that pay the most

      A much better answer would be to abolish corporate taxes and instead tax dividends through existing income tax systems. It'd get rid of a whole layer of distortion and bureaucracy, increase investment, reduce the destabilizing debt-over-equity preference (if the same tax was applied to debt interest) and it'd

  • If only Australia would do what the UK has done and target tax dodging corporations.

    That said, I do wonder if the UK is going to target some of the biggest tax dodgers (Mr Murdoch's media empire is VERY high on the list of global tax cheats yet no government seems to have the guts to go after them)

    • VERY high on the list of global tax cheats yet no government seems to have the guts to go after them

      What you mean is that you don't like the laws in place, not that the they're breaking a law that's in place. Try to get it straight.

  • Mixed Result (Score:2, Redundant)

    The UK government have done a good job of convincing the british public that big corporations not paying tax is something the evil killing the economy. Conveniently re-directing the blame from the true causes of the problem the incompetence and inefficiency of the government itself. Who do the british public think is going to pay for all this extra money given to the government? Corporates are not a free source of extra revenue for governments, the money has got to come from somewhere. The companies work e
    • by Shados ( 741919 )

      Its pretty common for people in those countries to complain about price differences. "With the exchange rate, this thing should be 20 pounds! but they charge 25! We're getting ripped off!", not considering the price of doing business in the area.

      After you hired people to deal with local laws, local marketing practices and culture, additional taxes and all the red tape...often you don't have a choice but to charge more. Even for digital goods!

A committee takes root and grows, it flowers, wilts and dies, scattering the seed from which other committees will bloom. -- Parkinson