Turnover tax

[Mich the Tester]

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

No; the government should stop making shortfalls by pissing money away.

[Ticktock]

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.

Again, no.

Company A rents space from Old Yeller and sells £1m of stock. People would expect Company A to pay tax based on that business, and OY to pay tax on the rental business in the UK.
If Company A rents space from Big YOLO and sell £1m of stock which they source from Company B (based in Lux), people would expect Company A to pay tax in the UK, Company B to pay tax in Lux, and BY to pay tax on the rental business in the UK.

Instead, what happens is more like,
Company A rents space in the UK - they fill this space with goods and sell the services of storing and shipping these goods. Running these services and paying the rent cost £x.
These services are sold to Company B in Lux for £x. Company A are in effect a non-profit entity.
Company B sell goods being held in the UK to customers in the UK, using a website with a UK domain, but say "We're not operating in the UK", and so are not liable for tax in the UK.
It is the fact that company A is owned by B (or is it the same parent company?) that rankles, as this is quite obviously set up simply to avoid the tax by claiming the revenue is generated in one country and not the other.

[VectraMan]

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.

So a French company ships 1000 widgets to a storage company in the UK, who then store them a while and redistribute them one at a time for a fee, because doing it that way is cheaper than shipping one at a time from France. Is that company making profits in the UK? And which company exactly? How can you work out the CT that the French company has to pay in the UK given that their costs are mostly in France and in a different currency? And does that mean that every company that wants to ship internationally has to register and pay CT in the end user's country?

Just pointing out how unworkable these "solutions" are. We need to either a) leave the EU and abandon free trade (call that the UKIP option), b) the EU needs to decide one CT rate for everyone, or c) accept that this sort of crap is always going to happen and we're powerless to prevent it.

[Mich the Tester]

So a French company ships 1000 widgets to a storage company in the UK, who then store them a while and redistribute them one at a time for a fee, because doing it that way is cheaper than shipping one at a time from France. Is that company making profits in the UK? And which company exactly? How can you work out the CT that the French company has to pay in the UK given that their costs are mostly in France and in a different currency? And does that mean that every company that wants to ship internationally has to register and pay CT in the end user's country?

Just pointing out how unworkable these "solutions" are. We need to either a) leave the EU and abandon free trade (call that the UKIP option), b) the EU needs to decide one CT rate for everyone, or c) accept that this sort of crap is always going to happen and we're powerless to prevent it.

I vote for option c.

[doodab]

No; the government should stop making shortfalls by pissing money away.

Even a well run country needs a tax take of 30-35% if you're going to have healthcare, social security, education, roads etc that work. In the grand scheme of things very little is pissed away, most of it is actually spent on important stuff and some bureaucratic overhead is inevitable IMO.

[VectraMan]

It is the fact that company A is owned by B (or is it the same parent company?) that rankles, as this is quite obviously set up simply to avoid the tax by claiming the revenue is generated in one country and not the other.

So if Amazon UK was sold and rebranded "Dodgy Dave's Distribution Ltd.", that would be okay by you? Nothing would change: you'd still buy from the Amazon website, the boxes would still say Amazon on them, they wouldn't pay any more tax, but the problem would be solved?

[Ticktock]

So if Amazon UK was sold and rebranded "Dodgy Dave's Distribution Ltd.", that would be okay by you? Nothing would change: you'd still buy from the Amazon website, the boxes would still say Amazon on them, they wouldn't pay any more tax, but the problem would be solved?

If Dodgy Dave's Dist. Ltd was truly independent, would they really act as a non-profit entity? Someone who knew how to actually make money would snap them up.

[Mich the Tester]

Even a well run country needs a tax take of 30-35% if you're going to have healthcare, social security, education, roads etc that work. In the grand scheme of things very little is pissed away, most of it is actually spent on important stuff and some bureaucratic overhead is inevitable IMO.

You are right, but 'some overhead'? SOME? Wars in Iraq, speed bumps every fooking 100 metres, quangos, endless planning procedures, bureaucrats dreaming up tulipe like IR35, quality systems wonks putting hospitals, schools and so on into league tables, come on; how much is really spent on unproductive cack? Everywhere you look you can see money being wasted and then along comes Mr Government demanding more. Somewhere this waste has to end. The whole of Europe (except Germany and Norway) has just come through, or is arguably still going through, a huge government debt crisis. You vote conservative and the debts keep building up. UKIP can't be expected to make a difference because they don't even turn up to work. Labour still think they didn't spend enough. Libs are much the same. The only way governments will ever be forced to control their spending is when they are starved of the cash they spend.

[doodab]

So if Amazon UK was sold and rebranded "Dodgy Dave's Distribution Ltd.", that would be okay by you? Nothing would change: you'd still buy from the Amazon website, the boxes would still say Amazon on them, they wouldn't pay any more tax, but the problem would be solved?

Ok, lets say it's myco. Lets say i import stuff from.luxembourg and sell it here. Where should i pay tax on my profits?

[Mich the Tester]

Ok, lets say it's myco. Lets say i import stuff from.luxembourg and sell it here. Where should i pay tax on my profits?

Monaco.