Turnover tax

[AtW]

If Amazon did start shipping everything from Luxembourg, would that make it okay? The end result would be higher costs for the consumer, and some UK workers losing their jobs.

It would be just fine so long as Luxembourg was charging corp tax at close levels to other EU countries - however charging it at effective 0 creates loophole whereby Amazon and others pay f-all.

[doodab]

So same as Amazon UK. If I buy something from Amazon, i.e. the website, I'm buying it from Amazon EU SARL, a company in Luxembourg who happen to use a delivery and distribution business in the UK. I've never bought anything from Amazon UK. How is that different from using DHL?

Amazon uk don't deliver, they use dhl or yodel or....

Dhl don't keep thousands of items in stock in a warehouse or sell them to consumers

[VectraMan]

It would be just fine so long as Luxembourg was charging corp tax at close levels to other EU countries - however charging it at effective 0 creates loophole whereby Amazon and others pay f-all.

Yep. So why is everybody moaning about Amazon et al when what we should be doing is moaning about Luxembourg?

[doodab]

It would be just fine so long as Luxembourg was charging corp tax at close levels to other EU countries - however charging it at effective 0 creates loophole whereby Amazon and others pay f-all.

It also means we effectively subsidise luxembourg at our expense.

[TheCyclingProgrammer]

They also pay a different rate of VAT - they charge the client 20% and then pay Luxembourg VAT rates at the end (which are significantly lower than the UK).

Wait, surely Amazon have to remit the 20% UK VAT to HMRC?

I know that Amazon (and Apple) currently have a big advantage over smaller retailers when it comes to ebook sales as they can charge Luxembourg VAT rates on ebooks (due to place of supply rules being different), however that will all change from January next year when electronically supplied services have to have VAT charged *where the customer belongs*. Its easy to see why the change is being brought in but its going to be a nightmare for any small business that sells any digital content to consumers.

[doodab]

Yep. So why is everybody moaning about Amazon et al when what we should be doing is moaning about Luxembourg?

Because luxembourg should be free to set corp tax at whatever level it chooses. The problem is companies using artifice to pay that rate of tax on profits generated in other countries.

[VectraMan]

Amazon uk don't deliver, they use dhl or yodel or....

Dhl don't keep thousands of items in stock in a warehouse or sell them to consumers

I would guess DHL do have thousands of items in warehouses, and Amazon UK doesn't sell the contents of its warehouses to consumers either. They just process orders on behalf of Amazon EU for a small fee.

Okay, call it a storage facility. If a business rents storage space from those Big Yellow people and sells £1m of stock from that storage space, are Big Yellow responsible for the corporation tax on £1m? That would be insane, but that's what people expect Amazon UK to be doing.

[doodab]

Okay, call it a storage facility. If a business rents storage space from those Big Yellow people and sells £1m of stock from that storage space, are Big Yellow responsible for the corporation tax on £1m? That would be insane, but that's what people expect Amazon UK to be doing.

No but the rented space would constitute a permanent establishment, making tax on the profit generated due in the UK. Avoiding that tax is what Amazon is doing, not running a storage facility.

[Mich the Tester]

Why do you lot want anybody at all to pay more tax? You know that a lot of the money will be pissed into the wind and that however much tax the government collects it'll always spend 3 to 7 % more, so stop calling for companies like Amazon to hand them even more cash. You just end up with more debt, more bureaucrats, more politicians, more speed bumps, more nonsense regulations and so on.

I, for one, applaud Amazon and Google for putting more money in the hands of their shareholders and keeping it out of the hands of wasting, ill disciplined politicians who've almost never balanced the books.

[doodab]

Why do you lot want anybody at all to pay more tax? You know that a lot of the money will be pissed into the wind and that however much tax the government collects it'll always spend 3 to 7 % more, so stop calling for companies like Amazon to hand them even more cash. You just end up with more debt, more bureaucrats, more politicians, more speed bumps, more nonsense regulations and so on.

Because when they dont pay it I have to make up the shortfall.