As in previous years, the UK accounts make clear Amazon.co.uk Limited claims not to sell to British online shoppers: instead the group’s Luxembourg arm fulfils that role. Amazon.co.uk Limited’s much more modest turnover of £679m comes from providing “fulfilment and corporate support services” to Luxembourg.
The Amazon group’s total UK sales of £5.3bn – representing 9.4% of its global sales – were taken through its Luxembourg company Amazon EU Sarl, which has a much smaller number of employees. Amazon EU Sarl also took billions from Germany, France and other major European economies.
That’s all entirely true.
It was not subject to tax on any resulting profits in those markets.
That’s bollocks. If Amazon as a whole makes profits and those profits are in the US to be paid to shareholders then it pays US corporation tax on those profits.
If Amazon as a whole doesn’t make profits (as it generally doesn’t) then of course there are no profits to tax.
The same people (ie Richard Murphy) who condemned Amazon’s reading of permanent establishment rules are now condemning George Osborne ‘ s Diverted Profits Tax for “undermining BEPS”. One would think they were just unobjective bought-and-paid-for mouthpieces for se far left pressure group…
The old turnover/profit bullshit again. Let’s judge everyone the same then.
Evil Amazon UK, sales £5.3b, tax paid £11.9m, 0.22%
Goody TJN, sales £580,171, tax paid £626, 0.11%
So who really is the evil corporation here?
Say, back in the 1970s, I’d phoned up a book shop in Luxembourg and ordered a book to be posted to me, no-one but a complete tax idiot would have expected the profits on that sale to be taxed anywhere other then Luxembourg.
That’s what we have now (in its most basic form) except I don’t phone them up, I go on the internet.
Now I know there are all sorts of nuances to that but the real change is that ‘internet’ thing. That’s all. Nothing that happens today couldn’t have and probably did happen 40 or 50 years ago.
It’s just that the internet has meant that the quantum of sales has increased.
Why is the fact that Amazon raised a lot of tax through the collection of VAT ignored? If the Sales were £5.3b Amazon paid £1.06b in VAT to treasury, and unlike some back street and dodgy shops, Amazon would not let this VAT monies disappear.
And Murphy and his ilk always present the low taxes paid in Luxembourg as somehow being money ‘stolen’ from the UK. That’s bollocks of course. Suppose the tax rate in Luxembourg was 10% or 15% or 95% and the same trade was carried out through Luxembourg. How much extra would the UK receive? F-all of course.
Nobody goes on about imports from the US as being money stolen from the UK economy and yet what difference does it make to the UK economy whether the £14.99 I spend on a book import goes to the US, Luxembourg or Timbucfuckingtoo?
It’s just more Murphybollocks.
I read it as meaning “It was not subject to tax in those countries on any resulting profits in those markets”
But the loose way it has been worded gives the impression that there is no tax at all, rather than leaving open the possibility of tax elsewhere.
Someone remind me of why the Guardian moved to the Cayman Islands again? What tax are they paying precisely?
No VAT on books sold into the UK. I’m not sure what % of Amazon’s sales are books any more.
So they pay no business rates on their UK warehouses? No PAYE and NI for their UK employees? Does anyone else get irritated by this simple – minded meme that corporation tax is a significant part of the UK tax take?
The VATable stuff will be a small percentage – and only applies to amazon’s sales. The sales by third parties such as me will be going through amazon but my company collects the VAT on sales for items belonging to my company.
The media often confuse amazon ltd tax paid with amazon seurl turnover.
Andy C
I think what’s really embarrassing about the entire canon of thought from Richard Murphy and his ilk – their hijacking of the word ‘progressive’ when their beliefs are in fact harking back to a bygone age. Who can forget ‘the letter by 79,( well ok 77 if you exclude Murphy and Howard Reed) economists to the garden where they were apparently oblivious to the foreign exchange sector of the economy. They are living in a bubble where intellectual discourse hasn’t really shifted since 1978 and anyone opposing them is defined as ‘Hard Right’ – quite why they are even given the time of day is quite beyond me. We need to marginalize them and subject them to confiscatory taxation so they (hopefully) leave the debate on a permanent basis.
You pay VAT on eBooks for your Kindle, that accounts for more than half the books sold by Amazon.
Amazon sell more than just books, just go and check their website, you will be surprised.
“It was not subject to tax on any resulting profits in those markets.”
Which bit of the term ‘Single Market’ don’t they get?
Now I know there are all sorts of nuances to that but the real change is that ‘internet’ thing. That’s all. Nothing that happens today couldn’t have and probably did happen 40 or 50 years ago.
Ah yes, but they use .co.uk and quote prices in £££ which means they should pay taxes in the UK. Or something.
@Tim Newman
You may be right. After all I access the .co.uk Amazon site on my laptop. And where is my laptop? Right here in the UK. If that isn’t a Permanent Establishment then Richard Murphy isn’t a tax expert.
Did you read what I wrote or did you just invent what you wanted me to have written?
Amazon is fucking awesome. I can choose practically any book I might want and have it delivered to my ipad in seconds. Not only that but I can purchase a plethora of other goods, 1/2 of which I didn’t know existed, by sitting on my arse and having them delivered the following day.
They can pay no tax as far as I care.
It’s people like Murphy who should be taxed at 99% to make them shut the fuck up.
If anyone bitches about Amazon and Tax, just ask them bluntly if they want to leave the EU.
As they’re mostly lefties they’ll say no, at which point just say that the EU was explicitly set up this way, and changing it requires leaving the EU.
Most of them shut up at this point…