
Amazon paid just £15m in tax on European revenues of £19.5bn - GordonS
https://www.theguardian.com/technology/2017/aug/10/amazon-uk-halves-its-corporation-tax-to-74m-as-sales-soar-to-7bn
======
d_theorist
Corporations are not taxed on revenue, so I can only assume that the headline
is designed to be inflammatory.

~~~
sololipsist
Jesus, I just found this place while looking for a reddit alternative, and
seeing comments like these are making me soooooooooooo happy.

This is going to sound pretentious as fuck, but I'm gonna say it anyway: I'm
so tired of the hoards of people passively accepting whatever headlines
reinforce their extremely simple, uniform bias / value set.

Maybe this is just a reflection of the bias / value set of the crowd here, but
at least it's a _different_ one. I hope it's an indication of a higher level
of general critical thinking, though.

~~~
johngarrison
I'm happy to say I think you'll be pleased with the level of critical thinking
here. I have also despaired at the state of Reddit.

Though, depending on your interests, some days there may not be much on HR
that tickles your attention.

~~~
sololipsist
I'm noticing that, which is a little bit of a bummer. One of the other things
I disliked about reddit is "science" or "technology" articles about things
that are theoretically pretty cool _if they exist_ , but don't, and likely
never will. Like the article here about the gears for space - I just can't
bring myself to give any fucks about a prototype. Put it in space and _then_
tell me about it.

That's fairly nit-picky, though. I'll take it.

------
rb808
It didn't pay much American tax either because it doesn't make any profits
anywhere.

Lots of physical shopping chains aren't paying tax because they dont make
money either.

The real question is will Amazon ever make money and at that time - will it
pay taxes then?

~~~
conradk
There is also a problem of large companies making it seem like they don't make
money, through complex financial montages, when in fact they do.

~~~
adventured
What does that have to do with Amazon? Their financials are public
information, show me where they're hiding the massive cash production, because
they must be hiding it from shareholders as well.

Amazon is still primarily a retailer, one with historically horrific margins.
The segment has notoriously bad margins in general (Costco & Walmart: typical
~2% net income margins, with very high income tax rates). Then there's Amazon,
spending like crazy since its inception to fund growth.

It makes perfect sense that they wouldn't be generating much in the way of
profit versus their revenue.

~~~
developer2
Saying that Walmart has "notoriously bad margins" makes it sound like they're
working at a disadvantage. Walmart's margins aren't low out of necessity.
Their entire business is purposely built around low margins, and refusing to
hire full time employees with benefits, etc. It's intentional on their part -
there is no sob story about margins there.

Same goes for Amazon et al. The business strategy is to crush every small
retailer by operating at slim to no margins, purely to make it impossible for
anyone else to compete.

~~~
pas
> The business strategy is to crush every small retailer by operating at slim
> to no margins, purely to make it impossible for anyone else to compete.

Large retailers compete against each other. Small retailers can't do much
anyhow. (Especially in heavily car based areas, if you have to go just a few
more minutes and you can find more and cheaper products, why would you stop at
a small shop?)

~~~
conradk
You are being subjective here. Maybe you like driving for more and cheaper
products, but not everyone is like you: not everyone drives, not everyones
wants to drive, some people prefer supporting small shops than big ones, etc,
etc.

~~~
pas
I don't like to drive, I like small shops, and luckily where I live we have a
healthy dose of small groceries. (But they are part of large chains.)

------
zsgoldberg
taxes aren't determined by revenue, i haven't even opened the article (yet)
and it's already stunted its own impact

~~~
wonder_bread
I don't like being rude in comments sections but that's a pretty dumb comment
to make, to be honest. I don't think the writer needs any help understanding
how tax bills are formulated, it's just meant to state a point. (Which you
would understand if you read the article before commenting)

~~~
rukittenme
What point is the author trying to state? "I don't understand tax bills"? It's
meant to be deceptive and garner clicks. The author presents the full and
complete story in the body of the text: "pre-tax profit of €59.6m last year"
and "a tax of €16.5m". That's "only" a 30% tax rate. And not a story worth
reading.

~~~
wonder_bread
The general point seems to be "large corporation doesn't pay its fair share of
taxes". Something that seems to be more of a hot-button issue in Europe

~~~
felipelemos
30% is not fair?

~~~
sololipsist
The real question is: Why should it be fair? We don't live in an ideal world,
we live in the real one. A "fair" tax rate, even if fairness could be
quantified and applied, might very well be a rate that causes businesses to
flee the country for more favorable rates. If the goal of taxes are to
increase the well-being of citizens, I don't see how driving businesses out of
the country en masse with them is an the best interests of the public. I'm not
saying that's necessarily the reality, but treating "fairness" as the most
important consideration is, to be blunt, asinine. What are the odds, really,
that a "fair" corporate tax rate is also the one that results in the greatest
well-being of the citizenry?

I would sacrifice economic justice for economic prosperity every day of the
week. I simply don't care if someone is "exploiting" me if that exploitation
actually increases my well-being in the most important ways, and while a lot
of people might disagree with that in abstract, I'm willing to be 99% of
adults would make the same decision if actually faced with that dichotomy.

------
aussieguy123
When it comes to corporate tax avoidance, the only headlines to take seriously
are "Company x paid x amount of tax on x profits". If it says "Company x made
x amount of revenue" or "Company x had x income last year" its not worth
reading, companies are taxed on profit, not revenue.

~~~
pas
There are some revenue based taxes. (For example municipal corporate taxes in
Hungary, about 1% of annual revenue.)

------
jamhan
Relevant?: [http://evonomics.com/amazon-accounting-corporate-profits-
ric...](http://evonomics.com/amazon-accounting-corporate-profits-rich-peoples-
income-invisible-bezos/)

~~~
pas
Relevant if you are talking about clickbait titles.

Capital gains are taxed at 20% at realization.

Tha articles (the site) makes the claim (by linking to an article on the same
site) that capital gains are not counted as income. Yes, duh, because it
counts as income when you close the position, sell the
bond/stock/derivative/instrument/company/asset/capital and so on.

Surprise, surprise, dividends, (bond) coupon payments, interest and other
yearly direct monetary (cash) payments do count as income.

And "some" economists don't ignore it:
[https://www.cbo.gov/publication/51361](https://www.cbo.gov/publication/51361)
(neither did Piketty as far as I can tell)

------
Veratyr
And?

> Amazon Europe, which is based in Luxembourg and aggregates the billions of
> pounds of sales the retailer makes from individual countries across the
> continent, reported a pre-tax profit of €59.6m last year. As a result the
> company, which clocked up €21.6bn in sales across Europe last year, had a
> tax bill of just €16.5m.

> Amazon is a hugely successful business but makes slim margins on the
> products its sells – the company recently warned it may report a loss in the
> third quarter – and with low profits comes a low tax bill.

These are about the only lines in the article that really matter.

------
BrandoElFollito
Honest question from someone who does not understand finance : why are
companies taxed on profit while I am taxes on revenue? We have both costs, of
different nature but still.

------
elvirs
people and companies behind amazon's desicions to keep growing instead of
making income are amazons largest shareholders and made billions from amazons
stock price going up. if they cant tax revenue then tax the capital gains from
soaring stock prices

~~~
mathperson
capital gains are only triggered when you sell the assets....taxing capital
gains from paper moves would be a very bad idea.

------
cs702
Amazon has never paid income taxes commensurate with its size to any
government, because it has never produced earnings commensurate with its size
for shareholders.

Amazon has always operated almost like a non-profit, non-taxable organization.

That's old news.

------
molestrangler
[http://www.bbc.co.uk/news/business-40884753](http://www.bbc.co.uk/news/business-40884753)

------
titledlee
i hate articles that base what companies should pay based on revenues -.- bruh
margins are shit for companies like AMZN , walmart etc

~~~
withholding
Not at all. This is a myth.

~~~
rukittenme
Show me in their financials where they are hiding their massive profit.

------
pravula
Why is this so hard? If you want companies to pay a percent of their revenues,
then write your tax code to tax a percentage of their revenues.

~~~
lend000
That's a terrible idea. It punishes companies that have slim margins and
raises prices for everyone. Washington State actually does something similar.

------
adrianratnapala
Can we just change the title to "Guardian beleives Guardianistas don't know
the difference between revenue and profit?"

------
potlee
Bezos doesn't have to pay anything on the 10s of billions worth of unrealized
gains in AMZN stock either. Income taxes discourage generation of income and
sales taxes discourage consumption. Wealth taxes are harder to dodge this way
and should make up more of the tax revenues.

~~~
rukittenme
> Bezos doesn't have to pay anything on the 10s of billions worth of
> unrealized gains in AMZN stock either.

It bugs me that you understand the gains are "unrealized" but still use it as
an argument to tax him. What part of "unrealized" do you not get?

I value your HN username at $10 billion. Pay a tax of $4 billion you greedy
jerk.

~~~
potlee
> What part of "unrealized" do you not get?

I don't think you understand any part of what "unrealized" means. "unrealized"
as it relates to taxation simply means that the asset has not beed sold.

> I value your HN username at $10 billion

What you might personally value my username and what the market values AMZN
stock at bear no similarity

Besides 40% percent is a insane amount, most wealth tax systems are well under
2%.

~~~
rukittenme
> I don't think you understand any part of what "unrealized" means.
> "unrealized" as it relates to taxation simply means that the asset has not
> beed sold.

No shit... At what point did I allude to it being otherwise?

> What you might personally value my username and what the market values AMZN
> stock at bear no similarity

Most people don't value Amazon at its current price. The majority of people
value it lower or higher. A thin margin of people trade within their sliver of
acceptable prices setting the current day trading price. To tax someone at the
value a small third party ascribes is so insanely stupid it beggars belief.

The "market cap" of a company has NO BASIS in reality. That's why stock prices
fluctuate like crazy for all but the biggest and most well known companies.

> Besides 40% percent is a insane amount, most wealth tax systems are well
> under 2%.

When do you pay this 2% tax? Every year? Say you own a $500,000 home -- not
unreasonable in California. They're going to have to pay $10,000 every year
for that home, even if they have no income. Even if they're living off their
savings or they're retired and on fixed income.

Let's say some couple bought their home in the 50's for $30k. Today the value
of the home is $500k. They're on a fixed income and can't afford to pay $10k
in taxes. Are you going to evict them for being "wealthy"? Just because the
market values their house at $500k as of this moment?

Boy, I can't wait for people to pump and dump stocks on tax day. It's going to
be great... Or I can't wait for people to trash their homes to decrease the
value and lower their tax burden.

\---

Let's take a step back. I just made an offer on your username for $10 billion.
Because no one else made an offer the current market value is $10 billion. It
will remain $10 billion until someone else makes an offer. At which point, how
you calculate the tax burden is up to you. Average? Weighted average? Moving
weighted average? Ascending triangle? Support and resistance? Any of the other
batshit technical analysis methods? What about the time period? Are you taxing
the wealth of the past day, month, year, decade?

"But!", you'll say, "You're just one guy, you don't get to determine the
market value of my username". And sadly for you, that's exactly what I get to
do. Houses have market values even though a single digit number of people
actually bid on them within a 20 year time period. Small cap stocks may only
trade a few shares a day.

Your username has had more offers in the past 10 years than my parents house
has. Their house has a market value, and now, so does your username. Pay your
taxes.

------
denysonique
Companies are greedy, taxes are ultimately paid by consumers - should a tax
become higher for amazon or any other company, they will immediately raise the
prices of their products to compensate the profit losses.

~~~
soperj
every other company that does pay taxes loses to amazon on this though.

------
cestith
The TL;DR of this article is the author dislikes the taxing basis put in place
by the legislature and is blaming Amazon for paying taxes legally based on
that.

Never mind the 65,000 employees in Europe who presumably do pay income taxes,
sales taxes, property taxes, and more based on the fact that they have their
income from their employer.

If someone wants to argue for a 1% or 2% revenue tax rather than a much higher
rate but only on profits, that's the argument to make. Don't blame the players
for playing by broken rules.

------
adventured
I'm all for giving Amazon flack where it's deserved. This tax witch-hunt isn't
one of those cases.

2016 pre-tax income: $3.89 billion

2016 income tax: $1.43 billion

2016 income tax rate: 36.7%

That's one of the highest rates on earth.

2015: $1.57b pre-tax income. $950m income taxes. That's a 60% rate.

They don't generate much taxable income. What exactly are they supposed to be
paying substantial taxes on other than that?

Should they be paying £30m (£50m?) in taxes on that £19.5 billion in European
revenue instead? Ok, let's go with that, they're both meaningless figures. How
is that a substantial matter to nail Amazon for (of all things) given the epic
scale of tax schemes throughout Europe?

~~~
DanBC
Isn't income tax paid by the employees, and not Amazon? What's the employer's
contribution?

What you're missing is that the UK has been going through years of austerity.
The UK public know some large companies have weird dodgy tax arrangements, and
while there's some acceptance that no-one pays the real tax rate there's
growing unrest about the very low rates paid by eg Starbucks or Google or
Amazon.

These companies can chose to pay a bit more tax, or face tighter regulation.

The current EU VAT laws are proof the EU is happy to make onerous laws about
tax

~~~
tolien
Also worth pointing out that a significant fraction of Amazon's (and
Starbucks'; perhaps less so Google) staff (and especially the thousands that
appear in the headlines when Amazon plants a big shed) are paid minimum wage
and the taxpayer (via Working Tax Credits etc.) will be boosting that wage.

