Amazon\’s tax dodging

Amazon’s UK operation generated £4.2bn of sales last year, but it used a subsidiary in Luxembourg to help it reduce its corporation tax bill in the country to just £2.4m in 2012. According to documents filed at Companies House, the company received £2.5m in government handouts over the same period.

It\’s a pretty strange complaint really. Leave aside all the EU Single Market stuff, the double taxation treaty with Luxembourg and all: it\’s all entirely legal whatever anyone says.

And look at the company\’s profits themselves. In 2012 Amazon as a whole made a $39 million loss.

Why would anyone at all expect tax revenue from a tax on profits at a company that doesn\’t make profits?

And even better: under Ritchie\’s unitary taxation system Amazon wouldn\’t even have paid £2.4 million in corporation tax. Instead it would have got a tax credit of $3 or $4 million. UK sales being around 10% of total global.

5 thoughts on “Amazon\’s tax dodging”

  1. Not disagreeing with you on the single market etc… but the annual report says the $39 loss is after tax.

    In 2012 the accounts say $544 operating profit with $ 428 set aside for tax and $155 equity method reinvestment.

    The accounts said they paid a 78.6% rate in 2012.

  2. TheJollyGreenMan

    Amazing how people don’t understand the business model of Amazon: wafer thin margins.

  3. Because Ritchie finds that he can make money by confusing people over the difference between actual profit and churn.

    He doesn’t care how much money Amazon had to *spend* to get that 4.2 bill in sales – he’ll just bitch about how much money went through AM’s hands, confident that the average person will just see that number and not realize what it really means.

  4. @TW If the EU is so complaisant about this kind of tax dodging,why are you so against it? The EU also makes the following illegal and/or impossible ,all on the standard laissez-faire hit list: Keynesian demand management; State aid for strategic industries ( How did Thatcher get away with the Sunderland/Nissan deal?); the public sector (private sector must bid); the European Court of Justice is anti -collective bargaining. I can understand why those strange boy men in the Conservative Party with their cheap suits and same haircuts as their mothers gave them getting into a state about it but had you down as a bit more balanced.

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