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Amazon and Starbucks pay less tax than sausage stall, says Austria

bbc.co.uk

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Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#21

Post by 4ad »

germanier wrote: post #10
jkot wrote: post #2

Does amazon even have a presence in austria? I thought it is handled from other countries.

They don't. Orders are handed over to their couriers abroad or transported by truck from Germany to the Austrian post at Allhaming.

Not true.

I live in Vienna, and I order a few orders from amazon every day. Last year I had over 600 amazon.de orders. Generally I try to order only Prime stuff.

The vast majority of orders (over 90%) come from Salzburg, Austria, although in a few occasions I even had same day shipping, those came from somewhere even closer.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#22

Post by marktheknife »

rayiner wrote: post #18
dogma1138 wrote: post #16

Earlier quoted context omitted.

Never understood that either, it always seemed to be a double taxation scheme to me. A corporation has effectively only a few things to do with their revenue which are or can be directly taxed more effectively. It can hire more people, or pay it's employees more, which means that money is taxed as income. It can invest the money directly which means that return on that investment can be taxed as capital gains. It can…

> Never understood that either, it always seemed to be a double taxation scheme to me. Corporations are legal persons, and income accruing to distinct legal persons is subject to tax. E.g. I get paid by my employer, and then pay tax on that. Then I pay my nanny with post-tax dollars, and she pays tax on that. That's not "double taxation"--just the nature of an income tax. Imagine that instead of forming a corporation…

I'm going to quibble a bit, hopefully not in an annoying fashion.

The distinction is that the tax system does not give a deduction to individuals who are spending their money on personal "consumptive" reasons. By and large, the system does give deductions for expenses incurred for business.

In this light, the double taxation of corporations is unusual. Clearly, the dividends are to pay back investors, just as interest is part of paying back lenders. But interest is deductible; why not dividends? Many theories have been advanced to justify this double tax, but none have won wide support among scholars.

(Interestingly, in your example, what probably would happen is that Bob would essentially be the effective managing partner of a general partnership. So we would be under partnership tax rules.)

A last quibble: partnership tax actually taxes partners even while the income is held by the partnership. (Well, generally; there apparently are some odd trust schemes that sort of avoid this.) in general, Partnerships must allocate the income to the partners, who bear the burden of tax. Then, they must later distribute the income in accord with how they've allocated it.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#23

Post by tedmiston »

kijeda wrote: post #9
hga wrote: post #3

Part of this makes an intuitive sense, a sausage stall has one trivially accessible "throat to choke", whereas Austria's access to e.g. Jeff Bezos is much more difficult. Starbucks, though, I'm assuming they've got retail shops in Austria? That just means they can afford better tax lawyers.

Maybe it has changed recently, but an interesting factor is the Austrian Starbucks have been run by an Austrian master franchisor, not by the company.

This is interesting because Starbucks doesnt franchise in the US [0]. They do have one alternative that's what you see in most airports and in coffee shops with the sign "proudly serving Starbucks coffee", for example Barnes & Noble cafes are this style. These third party stores, for instance, cannot accept payment from the Starbucks mobile app and offer only a subset of drinks. I'm not sure what the term for this is but it is some kind of licensing deal.

[0]: http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-f...

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#24

Post by grahamburger »

kartan wrote: post #17
j_m_b wrote: post #13

Why do we even tax corporations instead of just the income that its owners receive from the corporation?

That will mean that the money Facebook makes around the world is just taxed at whatever country Mark Zuckerberg lives. It doesn't look like it can work in such a globalized world.

Well, not really ... Also any country with Facebook employees, or with Facebook investors, or with companies deriving value from Facebook's platform.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#25

Post by germanier »

4ad wrote: post #21
germanier wrote: post #10

Earlier quoted context omitted.

They don't. Orders are handed over to their couriers abroad or transported by truck from Germany to the Austrian post at Allhaming.

Not true. I live in Vienna, and I order a few orders from amazon every day. Last year I had over 600 amazon.de orders. Generally I try to order only Prime stuff. The vast majority of orders (over 90%) come from Salzburg, Austria, although in a few occasions I even had same day shipping, those came from somewhere even closer.

They don't have any warehouse in Austria. This page has as far as I know the location of all their warehouses: http://www.mwpvl.com/html/amazon_com.html

The location printed on the label is the place they hand over the package (trucked from somewhere). I'm a bit surprised they seem to do that in such a volume in Salzburg. Previously they mostly used Allhaming (usually called Linz on packages).

For example, most my packages in Germany are labelled "Radefeld - Direct" but they originate from Poland or the Czech Republic, not the Amazon logistics center near that.

They also print a return address on the labels which is often another place distinct from outbound delivery (mostly Graben for me). Amazon uses multiple locations to accept packages and forward them to their warehouses.

I don't know anything about their same-day logistics though. It's the first time I hear that for Austrian addresses and no mention on their homepage, too.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#26

Post by mrweasel »

j_m_b wrote: post #13

Why do we even tax corporations instead of just the income that its owners receive from the corporation?

One solution I've heard proposed is taxing revenue. If a business, like Apple, Starbucks or Amazon sells something in a country, they pay a percentage of the revenue, not the profit.

It would be a very drastic change, and may items would need to have their prices adjusted, as low profit items could be a problem.

The clever bit is that tax heavens are not longer possible, because it's not important where you move your profit to.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#27

Post by skafjvhs »

Something about this story seems off to me.

>Mr Kern, who heads Austria's Social Democrats and the country's coalition government, also said Facebook and Google had sales of more than 100m euros each in Austria.

I'm not an expert on Austria but this suggests to me that this person can propose and possibly pass laws in Austria. He is not just an activist who only has the power to give interviews to BBC. If he thinks that Amazon and Starbucks are not paying enough tax to Austria, why doesn't he change Austrian law to charge them more tax? Don't give me some bullshit about how corporate lawyers will find loopholes - you run the government! Do your job! Change the law! Or at least make a show of trying.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#28

Post by pipio21 »

mrweasel wrote: post #26
j_m_b wrote: post #13

Why do we even tax corporations instead of just the income that its owners receive from the corporation?

One solution I've heard proposed is taxing revenue. If a business, like Apple, Starbucks or Amazon sells something in a country, they pay a percentage of the revenue, not the profit. It would be a very drastic change, and may items would need to have their prices adjusted, as low profit items could be a problem. The clever bit is that tax heavens are not longer possible, because it's not important where you move your…

This is not a solution, and it is not clever but stupid.

If someone in power is so stupid to do it, companies will stop operating on their country but the world will continue going around and tax heavens will continue existing.

Governments are bankrupt totally now, expending way more that what they earn, with 5% deficits or more and want to raise more and more money in taxes, but there is a limit on what they could extract, as people can stop working if they become slaves.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#29

Post by rayiner »

marktheknife wrote: post #22
rayiner wrote: post #18

Earlier quoted context omitted.

> Never understood that either, it always seemed to be a double taxation scheme to me. Corporations are legal persons, and income accruing to distinct legal persons is subject to tax. E.g. I get paid by my employer, and then pay tax on that. Then I pay my nanny with post-tax dollars, and she pays tax on that. That's not "double taxation"--just the nature of an income tax. Imagine that instead of forming a corporation…

I'm going to quibble a bit, hopefully not in an annoying fashion. The distinction is that the tax system does not give a deduction to individuals who are spending their money on personal "consumptive" reasons. By and large, the system does give deductions for expenses incurred for business. In this light, the double taxation of corporations is unusual. Clearly, the dividends are to pay back investors, just as interes…

Payment of dividends isn't either interest or a repayment of principal, since there is no obligation to pay dividends. They're also not expenses, since the company would generate the same revenue with or without paying dividends.

Re: Amazon and Starbucks pay less tax than sausage stall, says Austria

#30

Post by peletiah »

skafjvhs wrote: post #27

Something about this story seems off to me. >Mr Kern, who heads Austria's Social Democrats and the country's coalition government, also said Facebook and Google had sales of more than 100m euros each in Austria. I'm not an expert on Austria but this suggests to me that this person can propose and possibly pass laws in Austria. He is not just an activist who only has the power to give interviews to BBC. If he thinks t…

Kern only came into power in May, the social-democrats (SPÖ) have been in a "great coalition" with christian-democrats (ÖVP) since 2007. This coalition has been on rickety legs for many years now and there's not much the two parties agree on. There have been no noteworthy reforms for a decade.

There's also the threat of the populist far-right FPÖ, which has been gaining power again after two failed coalitions with the ÖVP 15 years ago (The FPÖ have been polling at ~30% for several months now, which is the largest approval of all parties).

Several members of the ÖVP-government and regional bodies are actively working against the great coalition and undermining the head of the ÖVP, sympathising with going back in a coalition with the fascists.

For all these reasons, Bundeskanzler Kern is not as powerful in legislature as would be desireable. Also I understand his remark as suggestion for a discussion and possibly a proposal for an EU-wide discussion on unifying tax laws. And he's probably fishing for votes with public statements on popular topics.

Personally I think he's the most promising Bundeskanzler we had in a long time, as he's an intellectual and is charismatic enough to potentially neutralize the threat of a far-right government.

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