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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

#71

Post by readittwice »

Hi, I am Austrian and I read the original interview in an austrian newspaper. It was very unspectacular and I am quite amused that it got international attention.

Our prime minister is wrong or at least slightly populist here. Yeah, Facebook/Google are not paying advertising duty. But no one does, at least in the internet. You only have to pay this duty if you advertise in TV, Radio, newspaper, etc. but it does NOT apply for the internet! See for yourself on the homepage of the austrian finance ministry (unfortunately in german): https://www.bmf.gv.at/steuern/a-z/Werbeabgabe.html. The law is from 2000, so probably before advertising in the internet became big.

Even if they change this law to include the internet, the Austrian companies that want to advertise would have to pay this tax (5% btw) since Google/Facebook do not have any offices in Austria (see chapter "Abgabenschuldner" in the link above). Google/Facebook don't even need to care about this law! (apart from that extending the law could make advertising in the internet more unattractive).

Why should they even pay corporate taxes in Austria? As already said they don't have any offices here.

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

#72

Post by tedmiston »

seanmcdirmid wrote: post #56
tedmiston wrote: post #53

Earlier quoted context omitted.

B&N menu isn't the full Starbucks, at least in the half dozen I've seen. Bakery & cafe food is definitely their own [0]. They also don't offer the full drink menu. [0]: http://www.barnesandnoble.com/mobile/h/cafe

They serve frappachinos and chai tea lattes, so the menu licensed goes way beyond coffee. Food differs drastically between each Starbucks districts anyways.

I think my comment was unclear. By "coffee", I was referring to the whole slew of basic coffee- and espresso-based drinks. However, B&N does not serve every flavor of every drink, stock every syrup, etc.

You can see that B&N lists 12 items under Espresso-based beverages (even that is an overestimate because they include normal coffee and iced tea lemonade) [0], while Starbucks Espresso-based list has 31 items [1]. Newer items like the Flat White are not at B&N cafes.

Source: Spent a lot of time at Starbucks in college while my girlfriend was a barista.

[0]: http://www.barnesandnoble.com/h/cafe/espresso-beverages

[1]: http://www.starbucks.com/menu/catalog/product?drink=brewed-c...

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

#73

Post by zaidf »

The smaller you are as a business, the closer you are to being an individual and less of a business. Of course, as an individual, basically any money you earn is taxed. You don't get to not pay tax on the $1,500/mo rent for your apartment where as as a business, you can deduct your offic rent.

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

#75

Post by SixSigma »

davidf18 wrote: post #57

Amazon and Starbucks spend a lot of money to hire highly competent tax attorneys and other staff to minimize their payment of taxes. Instead of complaining, countries need to pay more money to hire even brighter people to write better tax laws. Citizens of these countries need to elect officials who will do the hiring and not have obstructive laws that prohibits the payment of the large salaries and fees necessary to…

Having corrupt sweetheart deals with Luxembourg helps too.

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

#76

Post by seanmcdirmid »

tedmiston wrote: post #72
seanmcdirmid wrote: post #56

Earlier quoted context omitted.

They serve frappachinos and chai tea lattes, so the menu licensed goes way beyond coffee. Food differs drastically between each Starbucks districts anyways.

I think my comment was unclear. By "coffee", I was referring to the whole slew of basic coffee- and espresso-based drinks. However, B&N does not serve every flavor of every drink, stock every syrup, etc. You can see that B&N lists 12 items under Espresso-based beverages (even that is an overestimate because they include normal coffee and iced tea lemonade) [0], while Starbucks Espresso-based list has 31 items [1]. Ne…

I couldn't get chai tea lattes or every flavor syrup in Beijing anyways, so it is hard for me to judge. At least when I went to a B&N cafe Starbucks in the states, they had way more drink selection than a real Starbucks in Beijing.

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

#77

Post by eleumik »

nickff wrote: post #60
fauigerzigerk wrote: post #52

Earlier quoted context omitted.

>Apple wouldn't be playing the games it plays with the US if we didn't have the 2nd highest or so corporate tax rate in the world How low do you think that tax rate would have to be? Ireland's corporation tax rate is just 12.5%, but Apple didn't pay that either. They had a special deal under which their effective tax rate was as low as 0.005% to 1%. This is the deal that the EU has now ruled against under furious pro…

Apple's latest report said that they paid a little over 6% in taxes, whereas the 0.005% number came from someone looking to score political points (without any evidence); do you have a trustworthy source for either the 0.005% or 1% numbers?

bullock says 2% https://twitter.com/sinnfeinireland/status/77135179328457113...

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

#78

Post by fauigerzigerk »

nickff wrote: post #69
Marazan wrote: post #66

Earlier quoted context omitted.

It's in the EU documents.

My understanding is that EU documents estimate that number for the Irish tax take as percentage of total global revenue, it isn't their total effective tax rate (on profits as is common for corporations). The parent used a meaningless number in a misleading fashion.

I think it was completely obvious in the context that I wasn't talking about Apple's global effective tax rate but only about the taxes they pay in Ireland where all of their European sales are booked.

My understanding is that the numbers I quoted (in good faith) are derived from the profits Apple would have made in Europe had they not been allowed by the Irish government to use unrealistic transfer pricing.

http://europa.eu/rapid/press-release_IP-16-2923_en.htm

The numbers are certainly not meaningless, but whether or not they are misleading is for a court to decide. It was certainly not my intention to mislead and I do not have all the information to come up with more reliable estimates of Apple's real profits in Europe.

Also, as someone who is liable to pay personal taxes on top of profits already taxed through corporation tax I don't feel particularly biased or inclined to score political points in favor of higher taxes.

It is simply my opinion that shifting government income from one tax to another isn't necessarily going to improve avoidance overall. It is also my opinion that taxes always have to be compared to what they buy us, in terms of actual services and also in terms of being humane.

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

#79

Post by fauigerzigerk »

hga wrote: post #64
fauigerzigerk wrote: post #52

Earlier quoted context omitted.

>Apple wouldn't be playing the games it plays with the US if we didn't have the 2nd highest or so corporate tax rate in the world How low do you think that tax rate would have to be? Ireland's corporation tax rate is just 12.5%, but Apple didn't pay that either. They had a special deal under which their effective tax rate was as low as 0.005% to 1%. This is the deal that the EU has now ruled against under furious pro…

Echoing nickff, obviously they're going to seek out the lowest tax rate they can find for the greatest amount of money they can put there. But surely you can see that 35% is so high a rate they'll focus more on tax avoidance than is healthy for any of these parties, including themselves? The item I saw about regions indicated Europe was at around 18%. The nickff cited 6%, 12%, 18%, all those are reasonable, as well a…

>But surely you can see that 35% is so high a rate they'll focus more on tax avoidance than is healthy for any of these parties, including themselves?

I don't want to defend the US corporation tax structure, but I don't think corporation tax should be considered in isolation. Other countries have a low corporation tax and make up for it by high employer contributions to social security or other taxes.

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

#80

Post by gutnor »

rayiner wrote: post #62
davidf18 wrote: post #57

Amazon and Starbucks spend a lot of money to hire highly competent tax attorneys and other staff to minimize their payment of taxes. Instead of complaining, countries need to pay more money to hire even brighter people to write better tax laws. Citizens of these countries need to elect officials who will do the hiring and not have obstructive laws that prohibits the payment of the large salaries and fees necessary to…

The tax attorney thing is a red herring. Wal-Mart averaged a 29% tax rate from 2008 to 2012--higher than your average American and much higher than companies like Apple and Google. You think Wal-Mart can't afford good tax lawyers? Or to lobby aggressively for tax breaks? No, the problem both Wal-Mart and the local sausage cart have is they're "meat space" businesses. They can't shift profits to low-tax jurisdictions…

Apple and Google don't really compete with Walmart, so that's acceptable ( but not good ! )

What is really not acceptable is that a small company will pay 1 or 2 order of magnitude more tax than the giant they directly compete against.

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