Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bbc.co.uk

Post reply on HN
Print view View original

31–40 of 87 posts

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

#31

Post by PieterH »

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 what a sales tax, like VAT, is.

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

#32

Post by axlee »

j_m_b wrote: post #13

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

Because corporations thrive purely on the society they are making money from. No company lives in a vacuum.

However great and driven Elon Musk might be, he would never have made a single cent if he had started Paypal in Somalia. And what differentiates a market in Somalia from another market like, let's say, France?

Let's take this further. Zuckerberg makes a lot of money in France solely thanks to the technological infrastructure built by the society living there. Why would the French public let Facebook exploit this environment for his personal profit, while not paying its fair share to maintain the very same socio-economic environment that allows it to make money in the first place (and that everybody else is contributing towards)? Anyone would describe this behavior as parasitism.

Let's imagine you spend ten years building a shoe factory. After ten years, a stranger comes in and starts to use your factory at night to make shoes and sell them for his profit. Are you going to let him use your factory for free?

Even if your answer to this is "Well maybe there shouldn't be any public infrastructure in the first place", it simply shifts the problem somewhere else: if a private company would be managing the infrastructure, rest assured they would also ask for usage costs...which is precisely like a tax. A feodal tax.

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

#33

Post by mrweasel »

pipio21 wrote: post #28
mrweasel wrote: post #26

Earlier quoted context omitted.

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 e…

I honestly don't believe that a country would stop having companies, or not have access to certain products because of such a tax. Remember your country would have no corporate income tax, it's the consumers of your product who are effectively paying the tax. Only companies not making a profit would take issues with such a scheme.

Take Q8, they own gas stations in Denmark. Apparently they've made no profit in Denmark, EVER. That is of cause a blatant lie. They've just moved the profit abroad. Taxing the revenue, directly at the pump, would either drive a lying company out and make room for more honest ones, or they would start paying their share.

There's ALWAYS someone who see an opportunity. Coca Cola leaving because they refuse to pay your tax? Fine Pepsi will swoop in that same day.

What you're suggestion is that companies will only ever operate in countries that makes it possible to be creative with taxes.

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

#34

Post by peletiah »

Maarten88 wrote: post #11
kijeda wrote: post #9

Earlier quoted context omitted.

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.

The Austrian franchiser probably pays a lot for using the Starbucks brand and franchise concept to an offshore company (not in the US) owned by Starbucks, that pays a kickback to another offshore entity owned by the franchiser. Now all the profit is offshore. Everybody happy, except the Austrian government (who don't get corporate tax because the franchise hardly makes any profit in Austria) and sausage stands (who w…

> Everybody happy, except the Austrian government

And the population of Europe, who does missing out on taxes from these large corporations. This is not an Austrian issue, but one of the whole EU.

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

#35

Post by mrweasel »

PieterH wrote: post #31
mrweasel wrote: post #26

Earlier quoted context omitted.

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 what a sales tax, like VAT, is.

VAT isn't a sales tax. But yes, it's moving the entire taxation of companies to the sales tax level.

The US already have sales taxes, at least in some places. The US generally, as is my understanding, doesn't have a VAT. VAT is a consumption tax, sales taxes are taxing the sellers purchase.

The differers is very subtle.

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

#36

Post by shkkmo »

pipio21 wrote: post #28
mrweasel wrote: post #26

Earlier quoted context omitted.

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 e…

Why would any business stop operating in a country when they can simply raise prices to cover the tax? Everyone else will have to raise prices as well so nobody would be at a competitive disadvantage.

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

#37

Post by kuschku »

grahamburger wrote: post #24
kartan wrote: post #17

Earlier quoted context omitted.

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.

Which might all end up being in the US.

Meaning Austrian people pay money to a US corporation, the money is lost from the Austrian circulation, and won’t be taxable either.

That issue – of global profits all being moved into the US or taxhavens – has happened for many years now, and is severely hurting the economies of many countries.

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

#38

Post by poopsintub »

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.

Multiple conflicting people about where their packages are coming from? What's the chance there is a wharehouse but they can't list it for obvious tax purposes. They might be subcontracting to another company?

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

#39

Post by edko »

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 is what Estonia does. Corporate income tax is 0%. They tax companies, on a flat rate, on the dividends paid out. This encourages reinvestment and growth.

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

#40

Post by exDM69 »

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…

> 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?

Because Austria is a member of the EU and businesses in the EU but outside of Austria can operate there while paying taxes from their profits to their "home" country (VAT must be paid in Austria).

Now this is all good if the system wasn't so easy to exploit. Typical arrangements (like "double irish" or "dutch sandwich") have four, five or more subsidiaries in different legislations, each with their own locally negotiated tax breaks, doing complicated loan arrangements and IP licensing schemes that result in effectively zero tax (or a flat fee) and all the profits esacpe to Bermuda and Caymans.

There seems to be an Europe-wide crackdown on practices like this, and the Apple decision from earlier this week is just the beginning.

I'm really glad that this exploitative practice is (hopefully) coming to an end and the multinationals start paying their fair share.

Post reply on HN