Amazon paid just £15m in tax on European revenues of £19.5bn(theguardian.com)
theguardian.com
Amazon paid just £15m in tax on European revenues of £19.5bn
https://www.theguardian.com/technology/2017/aug/10/amazon-uk-halves-its-corporation-tax-to-74m-as-sales-soar-to-7bn
77 コメント
Corporations are not taxed on revenue, so I can only assume that the headline is designed to be inflammatory.
Jesus, I just found this place while looking for a reddit alternative, and seeing comments like these are making me soooooooooooo happy.
This is going to sound pretentious as fuck, but I'm gonna say it anyway: I'm so tired of the hoards of people passively accepting whatever headlines reinforce their extremely simple, uniform bias / value set.
Maybe this is just a reflection of the bias / value set of the crowd here, but at least it's a different one. I hope it's an indication of a higher level of general critical thinking, though.
This is going to sound pretentious as fuck, but I'm gonna say it anyway: I'm so tired of the hoards of people passively accepting whatever headlines reinforce their extremely simple, uniform bias / value set.
Maybe this is just a reflection of the bias / value set of the crowd here, but at least it's a different one. I hope it's an indication of a higher level of general critical thinking, though.
I'm happy to say I think you'll be pleased with the level of critical thinking here. I have also despaired at the state of Reddit.
Though, depending on your interests, some days there may not be much on HR that tickles your attention.
Though, depending on your interests, some days there may not be much on HR that tickles your attention.
I'm noticing that, which is a little bit of a bummer. One of the other things I disliked about reddit is "science" or "technology" articles about things that are theoretically pretty cool if they exist, but don't, and likely never will. Like the article here about the gears for space - I just can't bring myself to give any fucks about a prototype. Put it in space and then tell me about it.
That's fairly nit-picky, though. I'll take it.
That's fairly nit-picky, though. I'll take it.
I wouldn't have thought it was just designed to be inflammatory. It is rather striking they pay so little in relation to turnover. Presumably their reported earnings are low but given they have been increasing in market value at about $40bn/year it might indicate the accounting methods are not accurately reflecting reality. Time to modify the tax / accounting rules I think.
Why would you make such an assumption? Did the headline suggest that the (relatively small) tax was based on revenue? No, it did not. Please stop making such hasty, strong, and destructive comments. As we all already know, we have issues with weak (and disinformative) headlines; at least we can strive to have better comments and discussions.
> Why would you make such an assumption?
Because it would be wholly disingenuous to presume the opposite. The article in general and the headline in particular is juxtaposing tax against revenue explicitly in order to elicit the response that there's something fishy. The article even goes so far as to have a quote about tax avoidance whilst carefully avoiding accusing Amazon of tax avoidance.
It would have been a much more informative article if they had said, say, that Amazon expect to make a small loss on 20bn revenue and then go on to explain Amazon's business model. This would, of course, have shed a different light on their share scheme as it's clearly very beneficial for their workforce.
But no, it's a large American corporation that doesn't pay much UK tax so let's bang out a low quality article that insinuates heavily but says not a lot.
Full disclosure: I'm British, have no relationship to Amazon (other than as a customer) and am no relation to Mr Bezos though we do rock similar hairstyles.
Because it would be wholly disingenuous to presume the opposite. The article in general and the headline in particular is juxtaposing tax against revenue explicitly in order to elicit the response that there's something fishy. The article even goes so far as to have a quote about tax avoidance whilst carefully avoiding accusing Amazon of tax avoidance.
It would have been a much more informative article if they had said, say, that Amazon expect to make a small loss on 20bn revenue and then go on to explain Amazon's business model. This would, of course, have shed a different light on their share scheme as it's clearly very beneficial for their workforce.
But no, it's a large American corporation that doesn't pay much UK tax so let's bang out a low quality article that insinuates heavily but says not a lot.
Full disclosure: I'm British, have no relationship to Amazon (other than as a customer) and am no relation to Mr Bezos though we do rock similar hairstyles.
"Corporations are not taxed on revenue"
True. Now, perhaps offtopic: why are individuals taxed on revenue (ie salary, benefits ect), but corporations are not?
True. Now, perhaps offtopic: why are individuals taxed on revenue (ie salary, benefits ect), but corporations are not?
It didn't pay much American tax either because it doesn't make any profits anywhere.
Lots of physical shopping chains aren't paying tax because they dont make money either.
The real question is will Amazon ever make money and at that time - will it pay taxes then?
Lots of physical shopping chains aren't paying tax because they dont make money either.
The real question is will Amazon ever make money and at that time - will it pay taxes then?
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's Amazon, spending like crazy since its inception to fund growth.
It makes perfect sense that they wouldn't be generating much in the way of profit versus their revenue.
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's Amazon, spending like crazy since its inception to fund growth.
It makes perfect sense that they wouldn't be generating much in the way of profit versus their revenue.
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.
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.
> 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.
Large retailers compete against each other. Small retailers can't do much anyhow. (Especially in heavily car based areas, if you have to go just a few more minutes and you can find more and cheaper products, why would you stop at a small shop?)
Large retailers compete against each other. Small retailers can't do much anyhow. (Especially in heavily car based areas, if you have to go just a few more minutes and you can find more and cheaper products, why would you stop at a small shop?)
You are being subjective here. Maybe you like driving for more and cheaper products, but not everyone is like you: not everyone drives, not everyones wants to drive, some people prefer supporting small shops than big ones, etc, etc.
I don't like to drive, I like small shops, and luckily where I live we have a healthy dose of small groceries. (But they are part of large chains.)
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taxes aren't determined by revenue, i haven't even opened the article (yet) and it's already stunted its own impact
I don't like being rude in comments sections but that's a pretty dumb comment to make, to be honest. I don't think the writer needs any help understanding how tax bills are formulated, it's just meant to state a point. (Which you would understand if you read the article before commenting)
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.
30% is not fair?
The real question is: Why should it be fair? We don't live in an ideal world, we live in the real one. A "fair" tax rate, even if fairness could be quantified and applied, might very well be a rate that causes businesses to flee the country for more favorable rates. If the goal of taxes are to increase the well-being of citizens, I don't see how driving businesses out of the country en masse with them is an the best interests of the public. I'm not saying that's necessarily the reality, but treating "fairness" as the most important consideration is, to be blunt, asinine. What are the odds, really, that a "fair" corporate tax rate is also the one that results in the greatest well-being of the citizenry?
I would sacrifice economic justice for economic prosperity every day of the week. I simply don't care if someone is "exploiting" me if that exploitation actually increases my well-being in the most important ways, and while a lot of people might disagree with that in abstract, I'm willing to be 99% of adults would make the same decision if actually faced with that dichotomy.
I would sacrifice economic justice for economic prosperity every day of the week. I simply don't care if someone is "exploiting" me if that exploitation actually increases my well-being in the most important ways, and while a lot of people might disagree with that in abstract, I'm willing to be 99% of adults would make the same decision if actually faced with that dichotomy.
There isn't much of a point. Later in the story it says
> 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.
Essentially, the title is clickbait. There is a good discussion in there about tax avoidance, but tying it to revenue doesn't illuminate the topic.
> 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.
Essentially, the title is clickbait. There is a good discussion in there about tax avoidance, but tying it to revenue doesn't illuminate the topic.
The point is dumb, wrong, and written for advertisement dollars.
The unbridled greed behind these bloggers really makes me question my faith in journalism. It's like they only worship money.
The unbridled greed behind these bloggers really makes me question my faith in journalism. It's like they only worship money.
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That varies by jurisdiction. Gross Receipts Taxes [1] (including Washington State [2] where Amazon is headquartered) are levied against revenue and not profit.
[1] https://en.wikipedia.org/wiki/Gross_receipts_tax
[2] http://dor.wa.gov/content/FindTaxesAndRates/BAndOTax/
[1] https://en.wikipedia.org/wiki/Gross_receipts_tax
[2] http://dor.wa.gov/content/FindTaxesAndRates/BAndOTax/
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When it comes to corporate tax avoidance, the only headlines to take seriously are "Company x paid x amount of tax on x profits". If it says "Company x made x amount of revenue" or "Company x had x income last year" its not worth reading, companies are taxed on profit, not revenue.
There are some revenue based taxes. (For example municipal corporate taxes in Hungary, about 1% of annual revenue.)
Relevant if you are talking about clickbait titles.
Capital gains are taxed at 20% at realization.
Tha articles (the site) makes the claim (by linking to an article on the same site) that capital gains are not counted as income. Yes, duh, because it counts as income when you close the position, sell the bond/stock/derivative/instrument/company/asset/capital and so on.
Surprise, surprise, dividends, (bond) coupon payments, interest and other yearly direct monetary (cash) payments do count as income.
And "some" economists don't ignore it: https://www.cbo.gov/publication/51361 (neither did Piketty as far as I can tell)
Capital gains are taxed at 20% at realization.
Tha articles (the site) makes the claim (by linking to an article on the same site) that capital gains are not counted as income. Yes, duh, because it counts as income when you close the position, sell the bond/stock/derivative/instrument/company/asset/capital and so on.
Surprise, surprise, dividends, (bond) coupon payments, interest and other yearly direct monetary (cash) payments do count as income.
And "some" economists don't ignore it: https://www.cbo.gov/publication/51361 (neither did Piketty as far as I can tell)
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.
> 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.
Honest question from someone who does not understand finance : why are companies taxed on profit while I am taxes on revenue? We have both costs, of different nature but still.
people and companies behind amazon's desicions to keep growing instead of making income are amazons largest shareholders and made billions from amazons stock price going up. if they cant tax revenue then tax the capital gains from soaring stock prices
capital gains are only triggered when you sell the assets....taxing capital gains from paper moves would be a very bad idea.
Amazon has never paid income taxes commensurate with its size to any government, because it has never produced earnings commensurate with its size for shareholders.
Amazon has always operated almost like a non-profit, non-taxable organization.
That's old news.
Amazon has always operated almost like a non-profit, non-taxable organization.
That's old news.
i hate articles that base what companies should pay based on revenues -.- bruh margins are shit for companies like AMZN , walmart etc
Not at all. This is a myth.
Show me in their financials where they are hiding their massive profit.
Why is this so hard? If you want companies to pay a percent of their revenues, then write your tax code to tax a percentage of their revenues.
Can we just change the title to "Guardian beleives Guardianistas don't know the difference between revenue and profit?"
Bezos doesn't have to pay anything on the 10s of billions worth of unrealized gains in AMZN stock either. Income taxes discourage generation of income and sales taxes discourage consumption. Wealth taxes are harder to dodge this way and should make up more of the tax revenues.
> Bezos doesn't have to pay anything on the 10s of billions worth of unrealized gains in AMZN stock either.
It bugs me that you understand the gains are "unrealized" but still use it as an argument to tax him. What part of "unrealized" do you not get?
I value your HN username at $10 billion. Pay a tax of $4 billion you greedy jerk.
It bugs me that you understand the gains are "unrealized" but still use it as an argument to tax him. What part of "unrealized" do you not get?
I value your HN username at $10 billion. Pay a tax of $4 billion you greedy jerk.
> What part of "unrealized" do you not get?
I don't think you understand any part of what "unrealized" means. "unrealized" as it relates to taxation simply means that the asset has not beed sold.
> I value your HN username at $10 billion
What you might personally value my username and what the market values AMZN stock at bear no similarity
Besides 40% percent is a insane amount, most wealth tax systems are well under 2%.
I don't think you understand any part of what "unrealized" means. "unrealized" as it relates to taxation simply means that the asset has not beed sold.
> I value your HN username at $10 billion
What you might personally value my username and what the market values AMZN stock at bear no similarity
Besides 40% percent is a insane amount, most wealth tax systems are well under 2%.
> I don't think you understand any part of what "unrealized" means. "unrealized" as it relates to taxation simply means that the asset has not beed sold.
No shit... At what point did I allude to it being otherwise?
> What you might personally value my username and what the market values AMZN stock at bear no similarity
Most people don't value Amazon at its current price. The majority of people value it lower or higher. A thin margin of people trade within their sliver of acceptable prices setting the current day trading price. To tax someone at the value a small third party ascribes is so insanely stupid it beggars belief.
The "market cap" of a company has NO BASIS in reality. That's why stock prices fluctuate like crazy for all but the biggest and most well known companies.
> Besides 40% percent is a insane amount, most wealth tax systems are well under 2%.
When do you pay this 2% tax? Every year? Say you own a $500,000 home -- not unreasonable in California. They're going to have to pay $10,000 every year for that home, even if they have no income. Even if they're living off their savings or they're retired and on fixed income.
Let's say some couple bought their home in the 50's for $30k. Today the value of the home is $500k. They're on a fixed income and can't afford to pay $10k in taxes. Are you going to evict them for being "wealthy"? Just because the market values their house at $500k as of this moment?
Boy, I can't wait for people to pump and dump stocks on tax day. It's going to be great... Or I can't wait for people to trash their homes to decrease the value and lower their tax burden.
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Let's take a step back. I just made an offer on your username for $10 billion. Because no one else made an offer the current market value is $10 billion. It will remain $10 billion until someone else makes an offer. At which point, how you calculate the tax burden is up to you. Average? Weighted average? Moving weighted average? Ascending triangle? Support and resistance? Any of the other batshit technical analysis methods? What about the time period? Are you taxing the wealth of the past day, month, year, decade?
"But!", you'll say, "You're just one guy, you don't get to determine the market value of my username". And sadly for you, that's exactly what I get to do. Houses have market values even though a single digit number of people actually bid on them within a 20 year time period. Small cap stocks may only trade a few shares a day.
Your username has had more offers in the past 10 years than my parents house has. Their house has a market value, and now, so does your username. Pay your taxes.
No shit... At what point did I allude to it being otherwise?
> What you might personally value my username and what the market values AMZN stock at bear no similarity
Most people don't value Amazon at its current price. The majority of people value it lower or higher. A thin margin of people trade within their sliver of acceptable prices setting the current day trading price. To tax someone at the value a small third party ascribes is so insanely stupid it beggars belief.
The "market cap" of a company has NO BASIS in reality. That's why stock prices fluctuate like crazy for all but the biggest and most well known companies.
> Besides 40% percent is a insane amount, most wealth tax systems are well under 2%.
When do you pay this 2% tax? Every year? Say you own a $500,000 home -- not unreasonable in California. They're going to have to pay $10,000 every year for that home, even if they have no income. Even if they're living off their savings or they're retired and on fixed income.
Let's say some couple bought their home in the 50's for $30k. Today the value of the home is $500k. They're on a fixed income and can't afford to pay $10k in taxes. Are you going to evict them for being "wealthy"? Just because the market values their house at $500k as of this moment?
Boy, I can't wait for people to pump and dump stocks on tax day. It's going to be great... Or I can't wait for people to trash their homes to decrease the value and lower their tax burden.
---
Let's take a step back. I just made an offer on your username for $10 billion. Because no one else made an offer the current market value is $10 billion. It will remain $10 billion until someone else makes an offer. At which point, how you calculate the tax burden is up to you. Average? Weighted average? Moving weighted average? Ascending triangle? Support and resistance? Any of the other batshit technical analysis methods? What about the time period? Are you taxing the wealth of the past day, month, year, decade?
"But!", you'll say, "You're just one guy, you don't get to determine the market value of my username". And sadly for you, that's exactly what I get to do. Houses have market values even though a single digit number of people actually bid on them within a 20 year time period. Small cap stocks may only trade a few shares a day.
Your username has had more offers in the past 10 years than my parents house has. Their house has a market value, and now, so does your username. Pay your taxes.
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).
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).
> He shouldn't have to pay taxes on money he hasn't received
No one should have to pay taxes ideally, but the government needs money to provide basic services, keep us safe, etc. I don't think it is better to tax salaried people some of who can barely make ends meet before taxing someone who is sitting on $70 on unrealized capital gains just because he chooses not to sell.
No one should have to pay taxes ideally, but the government needs money to provide basic services, keep us safe, etc. I don't think it is better to tax salaried people some of who can barely make ends meet before taxing someone who is sitting on $70 on unrealized capital gains just because he chooses not to sell.
That $70B in unrealized gains is funding higher paying jobs for hundreds of thousands of people.
> Wealth taxes are harder to dodge this way and should make up more of the tax revenues.
Or estate (inheritance) tax which could be considered a special form of wealth tax.
Or estate (inheritance) tax which could be considered a special form of wealth tax.
Companies are greedy, taxes are ultimately paid by consumers - should a tax become higher for amazon or any other company, they will immediately raise the prices of their products to compensate the profit losses.
every other company that does pay taxes loses to amazon on this though.
One difference is that when taxes are fairly paid by companies and they raise prices, then the company that can offer the lower price due to operational efficiency will win. Right now, the burden of taxation falls on other persons in society without such tax avoidance expertise and muddies the waters.
The TL;DR of this article is the author dislikes the taxing basis put in place by the legislature and is blaming Amazon for paying taxes legally based on that.
Never mind the 65,000 employees in Europe who presumably do pay income taxes, sales taxes, property taxes, and more based on the fact that they have their income from their employer.
If someone wants to argue for a 1% or 2% revenue tax rather than a much higher rate but only on profits, that's the argument to make. Don't blame the players for playing by broken rules.
Never mind the 65,000 employees in Europe who presumably do pay income taxes, sales taxes, property taxes, and more based on the fact that they have their income from their employer.
If someone wants to argue for a 1% or 2% revenue tax rather than a much higher rate but only on profits, that's the argument to make. Don't blame the players for playing by broken rules.
falcolas(4)
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 that?
Should they be paying £30m (£50m?) in taxes on that £19.5 billion in European revenue instead? Ok, let's go with that, they're both meaningless figures. How is that a substantial matter to nail Amazon for (of all things) given the epic scale of tax schemes throughout Europe?
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 that?
Should they be paying £30m (£50m?) in taxes on that £19.5 billion in European revenue instead? Ok, let's go with that, they're both meaningless figures. How is that a substantial matter to nail Amazon for (of all things) given the epic scale of tax schemes throughout Europe?
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...)
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...)
Isn't income tax paid by the employees, and not Amazon? What's the employer's contribution?
What you're missing is that the UK has been going through years of austerity. The UK public know some large companies have weird dodgy tax arrangements, and while there's some acceptance that no-one pays the real tax rate there's growing unrest about the very low rates paid by eg Starbucks or Google or Amazon.
These companies can chose to pay a bit more tax, or face tighter regulation.
The current EU VAT laws are proof the EU is happy to make onerous laws about tax
What you're missing is that the UK has been going through years of austerity. The UK public know some large companies have weird dodgy tax arrangements, and while there's some acceptance that no-one pays the real tax rate there's growing unrest about the very low rates paid by eg Starbucks or Google or Amazon.
These companies can chose to pay a bit more tax, or face tighter regulation.
The current EU VAT laws are proof the EU is happy to make onerous laws about tax
Also worth pointing out that a significant fraction of Amazon's (and Starbucks'; perhaps less so Google) staff (and especially the thousands that appear in the headlines when Amazon plants a big shed) are paid minimum wage and the taxpayer (via Working Tax Credits etc.) will be boosting that wage.
Sales tax?