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Amazon's Luxembourg Tax Deals

samzenpus posted about a week ago | from the pay-less dept.

Australia 199

Presto Vivace writes in with this story of a European Commission investigation into a secret tax agreement between Amazon and Luxembourg. "Leaked tax documents from accounting firm PwC in Luxembourg show how Amazon sidesteps the 30 per cent tax rates local [Australian] players face. The Luxembourg documents, obtained in a review led by the International Consortium of Investigative Journalists, contain some of the first hard numbers and details on how Amazon pays virtually no tax for its non-US earnings, including in Australia. Last month, the European Commission announced an investigation into the secret 2003 advance tax agreement Amazon struck with Luxembourg that is the key to its global tax strategy. The Luxembourg documents show not only the extent of the related-party transactions in Amazon's Luxembourg companies but how Amazon has changed its tax strategy after investigation by French tax authorities and the US Internal Revenue Service. The change is so dramatic it raises questions whether the European Commission is targeting the right transactions."

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jury (0)

Anonymous Coward | about a week ago | (#48331311)

Cool, the people involved in this are going before a jury, right? ...right?

Re:jury (5, Insightful)

Anonymous Coward | about a week ago | (#48331323)

Cool, the people involved in this are going before a jury, right? ...right?

No.

And it's worth noting that Apple and Microsoft do the same thing, but because they're paying Slashdot, we're being set onto one of their competitors instead, like the baying pack of dogs we are.

Re:jury (5, Interesting)

disambiguated (1147551) | about a week ago | (#48331379)

They're just playing the game that's being played, they all do it. For example: Apple's Tax Strategy [nytimes.com]
They'd be incompetent if they didn't. You can order your own tax sandwich here [www.mhc.ie] (pdf)

Re:jury (5, Insightful)

williamhb (758070) | about a week ago | (#48331905)

They're just playing the game that's being played, they all do it. For example: Apple's Tax Strategy [nytimes.com]

No, much of their local competition in book sales etc (not being international companies with multiple subsidiaries in the EU) are not doing this. Apple etc's competitors are generally multinationals who also play these tricks. But in many cases Amazon's are not, and the effects of tax abuse are that much more problematic as they don't only affect tax revenue but also distort the market.

Re: jury (0)

Anonymous Coward | about a week ago | (#48332137)

Why are you against this? Are a communist or something?

Re: jury (2)

Roodvlees (2742853) | about a week ago | (#48332465)

eh? fairness? People have to pay taxes, so should companies!

Re:jury (1)

Barsteward (969998) | about a week ago | (#48332281)

I stopped using Amazon a few years ago when the tax avoidance became evident. Same goes for Google, Apple, Microsoft, Starbucks, Cafe Nero. As tax avoiders get known, they are removed my my list of places to buy.

Re:jury (-1)

Anonymous Coward | about a week ago | (#48331383)

>Apple and Microsoft do the same thing

[citation needed]

Re:jury (2, Funny)

Anonymous Coward | about a week ago | (#48331533)

Just Fucking Google It.

Re:jury (1)

Barsteward (969998) | about a week ago | (#48332283)

Check the trouble Ireland is in for this with Apple

But they have not been caught so blatantly (2)

dbIII (701233) | about a week ago | (#48331951)

This time it's Amazon becuase of damning evidence, that's why it's them this time and not Apple or Microsoft.
However there's more to come and it looks like there's something on Rupert Murdoch's companies (Fox, Newscorp etc) in the documents.

we wish (4, Insightful)

s.petry (762400) | about a week ago | (#48331355)

Not only will no executives be on trial for tax evasion, and not only will they not lose any of the fortunes they have been amassing as "bonuses", but we will soon be hearing about how Amazon is broke and taxes are unfair for a company the size of Amazon (it's only good for us commoners to keep us common).

Oh wait, a few threads are already making those latter claims...

Re:we wish (5, Informative)

TubeSteak (669689) | about a week ago | (#48331517)

It worked like this: Amazon Europe paid 105 million EU to Amazon Technologies Inc in Nevada to license the rights to Amazon's intellectual property -- the patents and software for the websites, including that button that buys a book with one click.

Amazon Europe onsold the rights to use this intellectual property to Amazon EU for 519 million EU -- five times what it had paid the US company. Amazon Europe made an instant profit of 414 million EU, which would have been taxable, except that Amazon Europe is a limited partnership. It doesn't pay tax in Luxembourg.

Normally this would be called "transfer pricing" and considered "tax avoidance."

Transfer pricing involves a company selling [stuff] to its subsidiaries at market cost.
Tax avoidance involves completely legal maneuvers to minimize your tax exposure.

There are international norms for transfer pricing [oecd.org] .
No way in hell is re-licensing some IP for a 400% profit going to pass muster.
Most likely, they'll have to restate some earnings and negotiate the size of their fine.

Over the last few years, there have been various hearings in the USA and internationally over transfer pricing.
It's on the radar of western governments and they're not very happy with the practice.

The most recent case I can think of was against Caterpillar. [foxrothschild.com]
They settled for peanuts on $2.4 billion in transferred profits.

Parallel Construction? (0)

Anonymous Coward | about a week ago | (#48332041)

International Consortium of Investigative Journalists is a very dubious organization too, I've seen them before and always thought they were a spook front putting out intercept data as 'Journalism / propaganda'. Any group outside of Washington that calls themselves a 'Consortium of Investigative Journalism' is guaranteed to be a lobbying front at the very minimum. How exactly did they get hold of Amazons internal secret tax documents, and come to release them? Is there some sort of mass intercept going on? The leaks from this group all look like parallel construction to me, I don't think any amount of 'investigative journalism' gets you secret documents which there are only a few copies of.

The problem there is they created an abstract property, 'IP' for fluff such as trademarks, and this was going to be the savior of the West. No longer would the West make and sell products and services, instead it would license IP rights to make and sell stuff. The US Patent Office was at the forefront of this expanding patents to cover non inventions, obvious things, and more.

But of course these IP rights can be exported far easier than a factory. You don't need to move people and machines, all that moves is a contract. It was inevitable that IP rights would be moved and licensed from the cheapest tax location. The West can't claim that IP rights should be cheap, when considering transfer pricing, and expensive when considering domestic Patent licenses. The markup on a patent license might be 100,000%!

As to the document you linked to, this is a guidance, more a case of OECD wishful thinking, because there's no mechanism in place to force companies to comply, and if any single IP right was overpriced, they would divide it down into 50 smaller rights in 50 jurisdictions. 400% markup you might be able to challenge in a court if you have the law available, but can you challenge 50 profits of 8% in all jurisdictions?

You see the problem? They wanted the IP rights to be in their own tax haven and be 90% of the costs of a company, but instead they're in a cheap tax country and that 90% is exported out of their tax domain.

IP: the last straw of capitalism? (0)

Anonymous Coward | about a week ago | (#48332119)

> The problem there is they created an abstract property, 'IP' for fluff such as trademarks, and this was going to be the savior of the West.
[...]
> But of course these IP rights can be exported far easier than a factory.

Yeah, I've been thinking along these lines too: with (current) capitalism being as dependent on growth as a junkie is dependent on the needle, there must be a space to grow into. Remember, this pyramid scheme has its roots on the good ol' times which culminated in the likes of the Honourable East India Company: then growth could be achieved by "discovering" new land (read: killing/enslaving those living there).

These days, all "discoverable" land is already "discovered", and some of those darn slaves are even starting to do stuff themselves. The only path of growth seems to be the Land of the Virtual Property. The Capitalistic Cloud.

Fool's gold.

Re:we wish (0)

Anonymous Coward | about a week ago | (#48331725)

last i checked, luxembourg is still a sovereign nation. this is about the USA is trying to tax companies & citizens of other countries.

Re:we wish (1)

Austerity Empowers (669817) | about a week ago | (#48331843)

They're part of the EU, and no doubt the US and EU have some back scratching deals to ensure everyone pays taxes to some degree or another. While we can debate who gets the better end of the deal, it is a natural solution to multinats trying to be above the law.

Re:we wish (0)

Anonymous Coward | about a week ago | (#48331753)

No, YOU wish. Please don't assume that your values are ours.

Who are the numbnuts modding this ignoramus up? (0)

TrollstonButterbeans (2914995) | about a week ago | (#48331991)

All large companies do this. From Google to Proctor & Gamble to Microsoft. Microsoft takes much of their revenue in Reno, Nevada to avoid taxes in Washingon.

Tax havens exist from the Cayman Islands and beyond --- Ireland until recently.

Any jackass modding the above ignoramous up is doing so on being completely gullible and is a complete shit-fer-brains.

Amazon would be incompetent to not attempt to avoid taxes.

And the above ignoramous no doubt works for a company whose companies strive to avoid taxes --- you cannot compete in the economy by offering more expensive products than the competition --- not in a global market.

Re:Who are the numbnuts modding this ignoramus up? (0)

Anonymous Coward | about a week ago | (#48332333)

All large companies do this.

Irrelevant. Just because everyone is doing something doesn't mean that it is right or that it shouldn't be dealt with.

Amazon would be incompetent to not attempt to avoid taxes.

Amazon would be incompetent if they do something illegal that causes them to be fined a larger amount than what they would have paid in taxes.

It is a problem in western society that we allow companies to act in a criminal and psychopath manner in the name of profit.
You might not see this as a problem, but that is probably because you don't realize that someone still has to pay to keep the military running, the roads maintained and the schools running. For every company that avoids paying their share of the taxes you have to foot the bill.

Re:jury (1, Troll)

AmigaUser8 (3898527) | about a week ago | (#48331597)

Congratulations on your first post! Yippeeee to you!

Re:jury (1)

kelemvor4 (1980226) | about a week ago | (#48331673)

Cool, the people involved in this are going before a jury, right? ...right?

Whoah there. Corporations are only people when it's in their benefit.

What was quote about Internet and censorship? (5, Interesting)

mi (197448) | about a week ago | (#48331315)

Paraphrasing John Gilmore [wikiquote.org] :Corporations interpret taxation as damage and route around it.

Re:What was quote about Internet and censorship? (2, Insightful)

roman_mir (125474) | about a week ago | (#48331475)

Taxation is damage and if you are not routing around it you get damaged. Income related taxes are anti-progress, anti-society, anti-economy. "Progressive" income taxes are anti-individual liberty, pro-discrimination. Income related taxes are immoral and bad economics (let government to grow when the other spending is actually cut by people, governments should be cut just like all other expenses when people cut down on spending, by tying government to income taxes, society destroys savings thus destroying and preventing capital investments).

Income taxation is immoral, not only bad politics. It is immoral because it assumes that government owns you, owns your productive output, thus owns your entire existence, your body, your life, your time on this planet.

Income taxes and fiat money and fiat printing are the evil that is destroying the economy and society and everybody needs to start routing around this damage.

Re:What was quote about Internet and censorship? (-1)

Anonymous Coward | about a week ago | (#48331615)

I didn't realize Nutballer Thursdays were celebrated on slashdot.

Re:What was quote about Internet and censorship? (0)

Anonymous Coward | about a week ago | (#48331697)

Amazon is doing exactly what they should. It's the politicians who fucked us.

Re:What was quote about Internet and censorship? (1)

Anonymous Coward | about a week ago | (#48331817)

It's roman_mir, every day is nutballer thursday.

Re:What was quote about Internet and censorship? (0)

Anonymous Coward | about a week ago | (#48331897)

... anti-progress, anti-society, anti-economy ...

So are all other taxes. Unless one judges free education and healthcare to benefit society and enable progress.

... Income related taxes are ...

In most respects, consumption tax is better than income tax. Which is why it has been added to income tax and capital assets tax. But with income tax, one has a predictable source of income and can apply a certain level of social responsibility to a person with X dollars.

A consumption tax is difficult to minimize in certain areas because modern living requires so many appliances: A poor family needs a computer and an internet service just like a billionaire. Now the billionaire will buy faster pipes and more computers but not 1000 times more, which his income permits. In other words, a rising tide does not lift all boats: A billionaire will not drink more coffee than a poor person: More expensive coffee definitely but it won't be 1000 times more expensive to match his income.

A consumption tax encourages saving money, but once saved it is removed from circulation which means it is can't be tax revenue either. Yes, the bank will circulate the money and create revenue. But corporations are taxed at a fixed rate, just like a consumption tax. A variable rate tax, like income tax ensures that excess wealth is consumed for the benefit of the employees. After all, the billionaire didn't spend all day driving to and fro. He paid a butt-load of employees to do that. Employees which the government had to educate and vaccinate. Which is why middle-class businessmen who whinge "taxes stop me being a millionaire" are dishonest: They are ignoring the benefits they received, such as courts and police to protect his property and his life.

Re:What was quote about Internet and censorship? (1, Interesting)

roman_mir (125474) | about a week ago | (#48331925)

The rising tide lifts all boats, you are completely confused as to what a tide is, just like vast majority of the economically challenged. It is not consumption by a billionaire or anybody for that matter that 'lifts all boats', it is production by the said billionaire, and production in case of a billionaire comes in the form of savings - the capital that does the work. It is savings, investments, production that lifts all boats, because only savings, investments and production create new / better / cheaper products and services that the poor can enjoy, while in the beginning all products and services can only be enjoyed by a very few select wealthy individuals. I am quite certain I just went way over your head though, you will need much more to understand why savings are crucial to investments and production and thus to the lifting of all boats, I will not spend more time on that here.

Variable taxes = discrimination and inequality under law and leads to destruction of individual freedoms by giving the government power that it must never have: the power to discriminate and apply laws judiciously rather than procedurally, in other words with 'progressive taxes' you create society that is ruled by men, not by laws, you push towards socialism/fascism and that is exactly what you get instead of prosperity, which requires equality under law, free market capitalism.

As to police, courts, roads, education, health, energy and whatever else you may think of that has government hands in it, none of it belongs to or in government at all, all of these are normal goods and services that should not be regulated or taxed or licensed (monopolised) in any way by government structures, but again, way over your head.

Re:What was quote about Internet and censorship? (1)

Kojiro Ganryu Sasaki (895364) | about a week ago | (#48332019)

Wait... You believe the police should be privatized?

Re:What was quote about Internet and censorship? (1)

roman_mir (125474) | about a week ago | (#48332027)

I believe that government is collective violence by definition and police in the hands of collective violent force is an instrument of oppression. Yes, I do not believe in collective aggression and yes, everything needs to be private.

Re:What was quote about Internet and censorship? (0)

Anonymous Coward | about a week ago | (#48332095)

So who do you turn to when your private police arrested you and are brought in front of a private judge who puts you in the private jail? Where the jail has payed the judge for more prisoners and the judge pays the police for more arrestees?

Now I understand that most of this is already true in the U.S.A.
There was even a story about a juvenile cases judge who was payed by the prison for each kid he send there, and he was in fact knowingly sending kids there who didn't deserve to go. In the end the judge got fired when it came out.

However this judge wouldn't be fired when everyone is private.

Re:What was quote about Internet and censorship? (1)

rhodium_mir (2876919) | about a week ago | (#48332253)

Don't forget your private continent [financial-...etting.com] .

Re:What was quote about Internet and censorship? (2)

dbIII (701233) | about a week ago | (#48331969)

Yes I understand your philosophy - teamwork is evil and expecting people to contribute to a group effort is evil.
Now that's out of the way can we take it as read that some don't agree with it and would ike to discuss details of this tax/tithe/volunteering stuff you see as evil?

Re:What was quote about Internet and censorship? (3, Insightful)

roman_mir (125474) | about a week ago | (#48331999)

Wrong, involuntary coercion is not teamwork. Violence is evil and what you call a 'team', I call a pack of thieves if they are using the collective to steal from others to subsidize themselves or anybody ag all. So lets start over: violence is evil. Real voluntary exchange is teamwork that does not rely on violence.

Using violence to force people to give up anything in life is evil, cooperating on voluntary basis is helpful.

Taxes are state (mob) violence. Non agression is not even discussed as a subject in state schools, which are used by the state to perpetrate evil stuff with the approval of the mob.

Re:What was quote about Internet and censorship? (1)

Beerdood (1451859) | about a week ago | (#48331977)

That's a nice rant on income taxation but the article here is discussing corporate taxation (and evasion).

Re:What was quote about Internet and censorship? (0)

roman_mir (125474) | about a week ago | (#48332013)

Corporations are a fiction, there are only people: investors, customers, employees. Taxes are paid from money that otherwise is personal income of one type or another.

Evasion is routing around tax damage, that is what people do and for a good and correct and moral reason. Yes, moral reason. Taxes are immoral theft and violence.

Re:What was quote about Internet and censorship? (1)

Anonymous Coward | about a week ago | (#48331601)

I'm sure you'd complain too if you had to pay $300,000,000 out of $1,000,000,000.

Paying 30 cents for a dollar doesn't seem like a lot... but $300,000,000 is quite a bit.

Tax rates are too high. This is why corporations evade them: so they can stay alive.

Re:What was quote about Internet and censorship? (4, Insightful)

Austerity Empowers (669817) | about a week ago | (#48331853)

Corporations avoid them because it is profitable to do so.

Re:What was quote about Internet and censorship? (1)

roman_mir (125474) | about a week ago | (#48331893)

Wow, insightful. People avoid having their money taken from them because it is profitable not to have your money taken from you. Hmmm. Water is wet, fire burns, people want other people's money.

Re:What was quote about Internet and censorship? (4, Insightful)

williamhb (758070) | about a week ago | (#48331913)

I'm sure you'd complain too if you had to pay $300,000,000 out of $1,000,000,000.

Paying 30 cents for a dollar doesn't seem like a lot... but $300,000,000 is quite a bit.

Tax rates are too high. This is why corporations evade them: so they can stay alive.

No, I think I'd be too busy sipping pina coladas on a beach somewhere to complain about much of anything if had $700 million after tax!

Re:What was quote about Internet and censorship? (0)

Anonymous Coward | about a week ago | (#48332421)

Tax rates are too high. This is why corporations evade them: so they can stay alive.

They can stay alive anyway.
Also, the problem isn't that the company tries to maximize profits, it's that when someone doesn't pay their share of the taxes the rest of us have to pay for it in increased taxes to keep the government running.
If you can get the large companies to pay taxes then the taxes could be lower for all of us without the government having less to work with.
If more companies avoids paying taxes then more of the expenses will have to be carried by everyone else.

Epidemic (-1)

Anonymous Coward | about a week ago | (#48331327)

go look at ALL the worlds largest companies, traders, hedge funds, phone/broadband, space companies, taxi firms, poker sites, tech/IP holding, lotteries, scratchcards, just about every finance based industry, health, they are all doing it, go lookup where every company advertising on tv is based, the cat is out the bag and tax avoidance is the new thang, if you aint avoiding, you aint fit to fuck over your community, i got mine, fuck you is a mantra

Re:Epidemic (1, Insightful)

mi (197448) | about a week ago | (#48331375)

go look at ALL the worlds largest companies, traders, hedge funds, phone/broadband, space companies, taxi firms, poker sites, tech/IP holding, lotteries, scratchcards, just about every finance based industry, health, they are all doing it

Taxes — by definition — are collected at the point of a weapon. It is perfectly natural to wish to avoid them. And we used to understand that attitude a lot better in this country — if Boston Tea Party has taught anybody anything...

Re:Epidemic (1)

Anonymous Coward | about a week ago | (#48332263)

if Boston Tea Party has taught anybody anything...

Yes, what was all that about again? No taxation without representation? With all the lobbying going on, wouldn't you agree that companies are more than adequately represented for the taxes they pay? How exactly does the tea party apply here?

Re:Epidemic (5, Insightful)

91degrees (207121) | about a week ago | (#48332545)

No. I pay taxes because it's my duty to society.

I also don't rob banks, because I consider it an obligation to society not to do so.

Perhaps you are a sociopath, and we need threats of violence to control people like you but not all of us are that way.

Epidemic (1)

Anonymous Coward | about a week ago | (#48331569)

Notice they don't put their businesses in some African shithole that offers no Government services. They take advantage of the services that Government provides like roads and an educated populace, but they never pay back.

Does Australia tax losses? (1)

iceperson (582205) | about a week ago | (#48331331)

If not then why would Amazon being paying any taxes? Of course I'm under the assumption Amazon still hasn't made any money, if that's changed then I must have missed it...

Re:Does Australia tax losses? (1)

putaro (235078) | about a week ago | (#48331349)

How much does Amazon Australia spend on R&D? I'm betting they do make a profit and remit it back to the US parent which then spends on R&D. Quite fair for Australia to ask for a cut of the profit made in Australia.

Re:Does Australia tax losses? (1)

dbIII (701233) | about a week ago | (#48331979)

Especially since the booksellers that do pay tax are undercut by Amazon and lose sales. A lot of bankruptcies have been blamed on that.

Re:Does Australia tax losses? (3, Informative)

guruevi (827432) | about a week ago | (#48331369)

Amazon is making a shitload of profit, they're just shifting the profits around by having their holdings that doesn't pay these taxes charge them a 'fee' to reduce the amount of profit they 'have'.

Re:Does Australia tax losses? (0)

Anonymous Coward | about a week ago | (#48331933)

Amazon does make a lot of money, however they currently reinvest that money back into the business. They use shell companies and tax havens to ensure countries like Australia where they are making a profit they can use to spend elsewhere and channel the funds to ensure no tax is paid.

Tax collection for hire (4, Interesting)

putaro (235078) | about a week ago | (#48331359)

Essentially what Luxembourg is doing here is offering tax collection as a service. Luxembourg collects a small percentage but much more than they would get otherwise, since Amazon et al. don't do much business in Luxembourg and offers these large corporations a legal shield against other countries' taxes.

This would appear to be a bug in the international tax system.

Re:Tax collection for hire (4, Insightful)

BitterOak (537666) | about a week ago | (#48331407)

This would appear to be a bug in the international tax system.

Quite the contrary. It's not a bug it's a feature. The kind of deal Amazon was able to strike with Luxembourg is an important defense against overly greedy countries (like the U.S.) which try to tax more than they should be entitled to. Note that the story says this is only about non-U.S. earning. Why should the U.S. be entitled to taxes on non-U.S. earnings?

If Luxembourg is willing to offer lower tax rates than other countries, why shouldn't Amazon accept? It's no different than choosing to shop at a store that offers the lowest prices.

Re:Tax collection for hire (1)

Anonymous Coward | about a week ago | (#48331447)

Here's a great book explaining the issue, sold by amazon no less: Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens [amazon.com]

Worth every penny, and a must-read regardless of your political leanings.

Re:Tax collection for hire (0, Insightful)

Anonymous Coward | about a week ago | (#48331813)

That's rubbish. The damage caused by corporations opting out of the USA's repressive tax regime and incomprehensible, idiotic rules is negligible compared to the harm and actual, verifiable damage caused by incompetent politicians stuffing their porkbarrels hand over fist. Why should Amazon/Apple/Google pay for smartbombs and drones used to kill children?
 
In the US those who avoid taxes hold the much higher moral ground. Besides, it'll take hundreds of millions of years at this rate for the US to pay that debt down. Makes no sense throwing more on the bonfire of Osama Barrack's ambitions. [zfacts.com] Unless perhaps you think all the children ought to die, and it's only fair that we all pitch in for the drones. [huffingtonpost.com]

Re:Tax collection for hire (1)

Anonymous Coward | about a week ago | (#48331483)

Note that the story says this is only about non-U.S. earning. Why should the U.S. be entitled to taxes on non-U.S. earnings?

You are a moron, aren't you? Non-US earnings are not taxed by US until money is transferred by said company back into the US. How fucking hard is it to comprehend that?

The fuckup is other nations that are apparently part of a "union" to transfer money between said jurisdictions that do NOT have unified tax code, to transfer them without paying fair taxes to the destination. EU either has to fix their tax system so tax rates are uniform, OR it has to stop with the practice of tax-free money flows in the EU. The entire system is fucked up and unfair to the regular taxpayer.

Of course, there are people, like the parent, that are too stupid to understand how taxation work in the first place. So things like tax heavens are completely over their heads.

For once and for all time, this has *NOTHING* to do with the US. US actually has a sane and fair system when it comes to repatriation of offshore money. It's EU's that is fucked and stuck in era before EU was formed.

Re: Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48331561)

Are you retarded? I ask because your posting indicates poor mental development or maybe some sort of brain injury.

Re:Tax collection for hire (1)

BitterOak (537666) | about a week ago | (#48331577)

Of course, there are people, like the parent, that are too stupid to understand how taxation work in the first place. So things like tax heavens are completely over their heads.

True, I was so stupid, I used to think they were called "tax havens", not "tax heavens". But I guess you enjoy paying taxes so much, you consider it a heavenly experience.

Re:Tax collection for hire (1)

putaro (235078) | about a week ago | (#48332195)

Well, considering that you're NOT paying taxes in a tax haven, tax "heaven" seems reasonable.

Re:Tax collection for hire (1)

jawtheshark (198669) | about a week ago | (#48332371)

Interestingly in many languages it is "heaven", just not in English. Deutsch = "Steuerparadies", French = "Paradis Fiscal", Dutch = "Belastingsparadijs". They all literally mean "tax heaven".

You're right, it's not correct in English, but you might see that the error is understandable if you're not a native English speaker. I'm not and funnily enough, I am from Luxembourg.

Re:Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48331709)

So, you think it's good that we've got a fucked up tax code that prevents money from coming back to the country? Really? You're retarded.

Re:Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48331921)

You seem to have some serious mental issues, this has EVERYTHING to do with the US tax system. The US system of taxing money that comes back into the country is retarded, it encourages companies to funnel money out of the country and where possible KEEP IT OUT, it also encourages the investigation and use of these avoidance schemes as the US tax system penalizes income made overseas in a double tax fashion. companies should only be required to pay tax on the money where they earn it, The US system in effect is a double tax (well it would be if companies were doing the right thing and paying tax where they earn it, but they actually avoid that too).

Re:Tax collection for hire (1)

TubeSteak (669689) | about a week ago | (#48331639)

Note that the story says this is only about non-U.S. earning.

If you RTFA, there's only one of three possibilities:
1. US assets were under priced in order to keep income out of the US.
2. European assets were over priced in order to shift income to a lower tax EU jurisdiction.
3. All of the Above

The correct answer is 3 and this story is not about US earnings, because those articles have already been written.
Special Report: Amazon's billion-dollar tax shield [reuters.com]
Dec 6, 2012

Amazon disclosed in October 2011 that the IRS wanted $1.5 billion in unpaid taxes. It has declined to say exactly what transactions the charge relates to but said it was linked to "transfer pricing with our foreign subsidiaries" over a seven-year period from 2005.

Who knows why the EU didn't bother to aggressively investigate until now.
The broad outlines were laid out years ago.

Re:Tax collection for hire (1)

Splab (574204) | about a week ago | (#48332037)

Well the positive thing about the EU finally getting involved is they have no trouble dealing out billion dollar fines.

But this goes *way* beyond Amazon. The director of the department where the lady in charge of investigating this (Magrethe Vestager) is the former prime minister of Luxembourg and *might* be deeply involved with the tax evasion.

Some very interesting times ahead, especially for Luxembourg...

Re:Tax collection for hire (3, Insightful)

penguinoid (724646) | about a week ago | (#48331841)

Why should the U.S. be entitled to taxes on non-U.S. earnings?

Why shouldn't I be able to declare my residence a PO Box in Luxembourg, and work in the US but deduct the majority of my earnings as licensing fees to my other headquarters (and so earned there rather than here), thus only paying a fraction of the taxes I would otherwise? And then receive government services and aid due to my low income? That's the sort of thing corporations do.

And actually I might be able to pull this off, if I create a company elsewhere, hire myself at my company at low wage, and offer the services of my company's employees (ie me) for top dollar, payed to the company. Though I have a sneaking suspicion that this isn't allowed for the little guy.

Re:Tax collection for hire (1)

williamhb (758070) | about a week ago | (#48331929)

Quite the contrary. It's not a bug it's a feature. The kind of deal Amazon was able to strike with Luxembourg is an important defense against overly greedy countries (like the U.S.) which try to tax more than they should be entitled to. Note that the story says this is only about non-U.S. earning. Why should the U.S. be entitled to taxes on non-U.S. earnings?

"Amazon EU ended up paying 0.5 per cent tax." So by your reckoning a tax rate of any higher than 0.5% is unwarranted government greed? I think you misunderstood what people mean when they talk about "the 1%" - it ain't supposed to be their tax rate!

Re:Tax collection for hire (1)

Anonymous Coward | about a week ago | (#48332045)

Point is, it is shopping for social infrastructure, rule of law and other bits of civilization - on which not only companies relies for business to be possible, but individuals too. Taxes are one way to pay for that.

Should all and everything be for sale?

Re:Tax collection for hire (4, Insightful)

putaro (235078) | about a week ago | (#48332057)

If it was only shielding non-US profits from US tax collection I'd be inclined to agree, but I think they're evading taxes in every country they're doing business in.

Luxembourg can afford to offer low tax rates because there's no cost to them. Amazon is using the infrastructure in other countries (e.g. roads, airports, etc.) to make money without paying for it. If they actually based their entire business in Luxembourg and then shipped worldwide I'd say it made sense. This is not competition on tax rates, this is just a scam.

Re:Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48332269)

Is Amazon not paying for the delivery trucks? The gas those trucks use? The packaging plant, the paper suppliers, the ink sellers? Are they not paying their employees a salary that goes to the local tax base? I don't understand why you believe that Amazon, having already paid local, state, and national taxes indirectedly once as a part of it's "cost of doing business", should now be required to cough up a portion of what they manage to scrape together at the end. How about we simply decree that corporations are allowed no profits at all, it should all be taken. Here's a hint - it still won't be enough. If governments were to balance their budgets first, and then whine about "greedy" corporations withholding money from them we'd have a place to start, but lack of revenue hasn't kept ANY government in the west from spending money they don't have.

Re:Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48332515)

Yeah, I pay sales tax on goods I purchase, yet I still have to pay income tax. Funny how that works.

Re:Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48332589)

It is a bit of both. Having low tax rates is not a problem.

If Luxembourg knew/knows about artificially moving profit into their country, they have a problem (at least morally).

This issue is of moving the taxable profits around, not of low taxes per se.

Re:Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48332365)

Sure and why shouldn't bankers send economies bankrupt by taking irresponsible actions?

These sorts of things are obviously okay because they're legal and everything legal is obviously good and acceptable. Those Wall Street Bankers are obviously all actually just heroes for screwing everything because why shouldn't they? I mean fuck everyone else right?

Re:Tax collection for hire (1)

bickerdyke (670000) | about a week ago | (#48332387)

Quite the contrary. It's not a bug it's a feature. The kind of deal Amazon was able to strike with Luxembourg is an important defense against overly greedy countries (like the U.S.) which try to tax more than they should be entitled to.

Well, then I'm supposed to say "thank you" fot this "defense" that allows to pay these companies much less than they "should" have to pay?

Sorry, but that is pure rubbish as there is no objective view on how many taxes a company SHOULD have to pay. (This holds for my above example, too, of course)

Entities have to pay as many taxes as the laws require them to pay. But defining how many taxes someone SHOULD have to pay, depends on who you're asking. Me for example, shouldn't have to pay any taxes, because I'm simply awesome.

Re:Tax collection for hire (0)

Anonymous Coward | about a week ago | (#48332505)

As someone living overseas subject to the same rules, why aren't there ways for me to get around the USA's double taxation? Oh right, I'm not rich enough to set myself up as a corporation. Guess it serves me right for being poor.

Smaller scale? (1)

drinkypoo (153816) | about a week ago | (#48331649)

So the question then becomes, is anyone running a service which makes this available to individuals for a fee? If it's legal for Amazon, it must be legal in general, right? You contract them to handle your finances or something.

Re:Smaller scale? (1)

putaro (235078) | about a week ago | (#48332065)

Well, as a normal US citizen (I'm an ex-pat so I have to deal with this crap) the US wants to tax you on your worldwide income. The only legal way to avoid that is to give up your US citizenship. Currently, I think the US is the only country that tries to tax you on your worldwide income so pretty much if you shift your citizenship to any other country you can then go reside in whatever low tax locale you can and only pay the local taxes. The US has come up with an "exit tax" though, so if you have a substantial amount of assets and want to give up your US citizenship they want you to pay for the privilege of leaving.

Re:Smaller scale? (0)

Anonymous Coward | about a week ago | (#48332135)

Currently, I think the US is the only country that tries to tax you on your worldwide income so pretty much if you shift your citizenship to any other country you can then go reside in whatever low tax locale you can and only pay the local taxes.

Canada as the same tax scheme as well. You have to be out of the country for at least 2 consecutive years (365 days X 2) and own no real property in Canada as a primary residence. Taxes in Canada make the USA seems like a tax haven with the exception of NY state and a few other states.

Re:Smaller scale? (1)

putaro (235078) | about a week ago | (#48332177)

Actually, it doesn't matter how long you reside outside of the US they still want their bite.

Re:Smaller scale? (1)

stoploss (2842505) | about a week ago | (#48332481)

Actually, it doesn't matter how long you reside outside of the US they still want their bite.

Actually, it's even better than that: even if you live outside of the US and renounce your US citizenship they still want their bite.

How is this different? (1)

YrWrstNtmr (564987) | about a week ago | (#48331381)

How is this different than the other zillion companies that funnel money through Luxembourg for tax purposes. Or in the US, in Delaware?

Oh, I get it....because it is a geek company, Amazon.

FUCk? (-1, Offtopic)

Anonymous Coward | about a week ago | (#48331459)

recruitment, bu7 THE DEVELOPER

There will always be tax loopholes (0)

Anonymous Coward | about a week ago | (#48331497)

There will always be tax loopholes that allow companies to avoid paying taxes to country X on income that is earned in country Y.

One well-known form is to sell yourself to a foreign holding company in country Y, move all of your assets and employees out of country X except the few you need to serve your customers in country X, and if it helps to avoid taxes in country Y, to do all business in country X through a subsidiary headquartered in country X and keep the profits in that country so your new host country doesn't have a claim to them.

Another technique is to do all of the above but abandon the market in country X entirely (this is the "take your marbles leave" strategy).

These techniques aren't "cheap" so companies usually prefer other, less-expensive loopholes if they exist.

Re:There will always be tax loopholes (2)

Roodvlees (2742853) | about a week ago | (#48332513)

"There will always be tax loopholes" No that's the result of politics, it could easily change.

Tax evasion (0)

Anonymous Coward | about a week ago | (#48331501)

This seems to be what all the big companies go for. We really need to close all these loopholes. We in the us would then cover the deficit and have a crazy surplus. I have been labeled a troll for Pointing this out on slashdot earlier. Couldn't have anything to do with their ties on this issue.

Re:Tax evasion (1)

Roodvlees (2742853) | about a week ago | (#48332509)

European governments could do this today...

Don't like it? Make your own Amazon! (0)

Anonymous Coward | about a week ago | (#48331523)

U.S.A. #1

Re:Don't like it? Make your own Amazon! (1)

AmigaUser8 (3898527) | about a week ago | (#48331549)

USA! USA! The greatest nation on earth.

Re:Don't like it? Make your own Amazon! (1)

AmigaUser8 (3898527) | about a week ago | (#48331565)

U S A

Sales to foreign companies (0)

Anonymous Coward | about a week ago | (#48331551)

Require them to pay taxes on the revenue locally before the money can leave the country.

Re:Sales to foreign companies (1)

AmigaUser8 (3898527) | about a week ago | (#48331583)

U S A ! U S A !

Re:Sales to foreign companies (1)

AmigaUser8 (3898527) | about a week ago | (#48331591)

U S A !

Cool (0)

Anonymous Coward | about a week ago | (#48331749)

I don't mind this at all really. If the governments can't come up with a reasonable tax plan that isn't a library of complicated laws, I'm happy to see companies figure out how to fuck it. If i made a lot of money, i'd try trick as well... but it's cheaper to pretend to be poor and milk the government that way for myself for the time being.

What about VAT? (0)

Anonymous Coward | about a week ago | (#48332087)

When you buy something on Amazon, they increase the price by the local VAT of the EU country you live in. Where does it go? Do they return it to the local government?

Re:What about VAT? (1)

Roodvlees (2742853) | about a week ago | (#48332499)

True, that's the taxes citizens pay. And european get a better government in return.

Tax = NSA, the national raisin reserve, etc, etc. (0)

Anonymous Coward | about a week ago | (#48332097)

Best news all day.

Amazon use that money for far, far better things than a government ever would or *could*.

Every cent Amazon keeps goes into making new jobs - they look to expand their business as much as possible.

Governments by contrast are astoundingly profligate and with the money they take are incredibly wasteful or evil. Bridges to nowhere, the national raisin reserve, the NSA, you name it.

I'd infinitely rather Amazon had the money that any government in the world.

Thank God for creative tax avoidance.

Re:Tax = NSA, the national raisin reserve, etc, et (1)

Roodvlees (2742853) | about a week ago | (#48332491)

I'd rather have the money myself by paying less taxes myself and letting companies pay the difference that goverment misses out on.

collect tax when the money is spent (1)

bigtreeman (565428) | about a week ago | (#48332259)

If banks became the tax collectors in the country of purchase/payment, taxes would be payed where they belong.

GST is currently collected by the companies who want to minimise their tax spend.
Banks don't care, it's not their money, and they're really good at grabbing other peoples money.

Simplify tax laws, tax a reasonable amount in the first place, don't have tax refunds.

mass stupidity (2)

Roodvlees (2742853) | about a week ago | (#48332483)

It's so stupid for countries to each have their own special tax exemptions thinking they can lure in some extra companies. The end result is that big companies have meaningless (=no extra jobs but empty buildings) box offices everywhere and effectively pay no taxes. Anywhere! So in the end the countries not only receive no benefits, but also less taxes from their own companies. And it heavily favors big companies over smaller ones. But I guess politics are too corrupt and big companies are paying too much 'lobbying' money to keep this stuff going.
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