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Amazon paid just £15m in tax on European revenues of £19.5bn

theguardian.com

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Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#41

Post by runesoerensen »

rukittenme wrote: post #29
falcolas wrote: post #22

Earlier quoted context omitted.

Ooh, HN Comment Bingo! "Don't blame the company for exploiting the loopholes in the laws!" This is a very old argument that gets rather tiresome to see on every article dealing with how much/little corporations pay in taxes. I'd rather see some interesting discussion around whether they should be paying more (or less).

ITS NOT A LOOPHOLE. This isn't some oversight. The tax law was written that way with intent! People don't want companies to pay tax on revenue. And Amazon makes very little profit! No company on earth spends $100 so they can save $40 on their tax bill. It is nonsensical.

> No company on earth spends $100 so they can save $40 on their tax bill. It is nonsensical.

How is that nonsensical? Seems like lots of companies expend/transfer/invest rather than being taxed on their profits?

Edit: Replaced "to avoid" with "rather than".

Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#43

Post by darawk »

wonder_bread wrote: post #21
rukittenme wrote: post #15

Earlier quoted context omitted.

What point is the author trying to state? "I don't understand tax bills"? It's meant to be deceptive and garner clicks. The author presents the full and complete story in the body of the text: "pre-tax profit of €59.6m last year" and "a tax of €16.5m". That's "only" a 30% tax rate. And not a story worth reading.

The general point seems to be "large corporation doesn't pay its fair share of taxes". Something that seems to be more of a hot-button issue in Europe

Ya, and something that makes zero sense in the context of revenue. Nobody is taxed on revenue because taxing companies on revenue unfairly penalizes low-margin high-volume businesses (like Amazon). Revenue has nothing to do with tax rate. Nothing. Quoting their revenue in the headline is just meant to shock people that don't understand taxes. It's a bullshit headline and a bullshit story.

Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#45

Post by felipelemos »

wonder_bread wrote: post #21
rukittenme wrote: post #15

Earlier quoted context omitted.

What point is the author trying to state? "I don't understand tax bills"? It's meant to be deceptive and garner clicks. The author presents the full and complete story in the body of the text: "pre-tax profit of €59.6m last year" and "a tax of €16.5m". That's "only" a 30% tax rate. And not a story worth reading.

The general point seems to be "large corporation doesn't pay its fair share of taxes". Something that seems to be more of a hot-button issue in Europe

30% is not fair?

Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#46

Post by wweidendorf »

adventured wrote: post #6

I'm all for giving Amazon flack where it's deserved. This tax witch-hunt isn't one of those cases. 2016 pre-tax income: $3.89 billion 2016 income tax: $1.43 billion 2016 income tax rate: 36.7% That's one of the highest rates on earth. 2015: $1.57b pre-tax income. $950m income taxes. That's a 60% rate. They don't generate much taxable income. What exactly are they supposed to be paying substantial taxes on other than…

While $1.43 billion may be the GAAP tax rate they record, in practice they did not pay anywhere near that much.

For the 2016 reporting period, cash taxes paid was recorded at $412 million, not the $1.43 billion you noted above. Given that, their effective cash tax rate was 10.6%, not the 36.7% you quoted.

Source: Page 22, AMZN 2016 10-K (https://www.sec.gov/Archives/edgar/data/1018724/000101872417...)

Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#47

Post by valuearb »

potlee wrote: post #34
qaq wrote: post #25

Earlier quoted context omitted.

You really think it's beneficial to take away ownership from a successful founder and transfer it under control of some pension fund manager?

Wealth taxes are supposed to be paid in cash not stock so he would have to liquidate of the stock

What's your point? You are still taking part of the founder's control away, and giving it to some third party.

Bezo's has paid a huge amount of taxes on shares of stock he's actually sold. He shouldn't have to pay taxes on money he hasn't received or is even able to spend yet. What's best for Society is that both he and his capital remains in Amazon as long as possible as investment, not being turned into consumption (which would slow Amazon's growth rate down, slow it's ability to increase productivity and raise our standard of living).

Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#48

Post by rukittenme »

runesoerensen wrote: post #41
rukittenme wrote: post #29

Earlier quoted context omitted.

ITS NOT A LOOPHOLE. This isn't some oversight. The tax law was written that way with intent! People don't want companies to pay tax on revenue. And Amazon makes very little profit! No company on earth spends $100 so they can save $40 on their tax bill. It is nonsensical.

> No company on earth spends $100 so they can save $40 on their tax bill. It is nonsensical. How is that nonsensical? Seems like lots of companies expend/transfer/invest rather than being taxed on their profits? Edit: Replaced "to avoid" with "rather than".

Yes but they're not spending $100 to "dodge taxes". They're spending the money on positive NPV projects. You're mistaking an effect for a cause. Companies invest and expand and they pay less taxes as an effect. But in the future, they'll have to pay taxes on those revenue generating facilities they invested in.

And if those investments go belly up then the company will LOSE more money than it ever gained by "dodging taxes".

Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#49

Post by Veratyr »

And?

> Amazon Europe, which is based in Luxembourg and aggregates the billions of pounds of sales the retailer makes from individual countries across the continent, reported a pre-tax profit of €59.6m last year. As a result the company, which clocked up €21.6bn in sales across Europe last year, had a tax bill of just €16.5m.

> Amazon is a hugely successful business but makes slim margins on the products its sells – the company recently warned it may report a loss in the third quarter – and with low profits comes a low tax bill.

These are about the only lines in the article that really matter.

Re: Amazon paid just £15m in tax on European revenues of £19.5bn

#50

Post by developer2 »

adventured wrote: post #9
conradk wrote: post #4

Earlier quoted context omitted.

There is also a problem of large companies making it seem like they don't make money, through complex financial montages, when in fact they do.

What does that have to do with Amazon? Their financials are public information, show me where they're hiding the massive cash production, because they must be hiding it from shareholders as well. Amazon is still primarily a retailer, one with historically horrific margins. The segment has notoriously bad margins in general (Costco & Walmart: typical ~2% net income margins, with very high income tax rates). Then there…

Saying that Walmart has "notoriously bad margins" makes it sound like they're working at a disadvantage. Walmart's margins aren't low out of necessity. Their entire business is purposely built around low margins, and refusing to hire full time employees with benefits, etc. It's intentional on their part - there is no sob story about margins there.

Same goes for Amazon et al. The business strategy is to crush every small retailer by operating at slim to no margins, purely to make it impossible for anyone else to compete.

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