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France seeks over $250 million in back taxes from Amazon

by Mark Tyson on 14 November 2012, 16:30

Tags: Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Starbucks

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The French tax authorities have sent a bill to Amazon for back taxes amounting to US $252 million, it has been revealed. The move by France comes just after the likes of Amazon, Google and Starbucks hit the headlines in the British press for avoiding UK tax through all manner of schemes and loopholes. Yesterday these multinationals' tax-avoidance schemes were slammed as immoral by The Independent, for example.

Today we have learnt that France is cracking down on Amazon for past tax swerves. The period under scrutiny spans from 2006 to 2010 and on top of missed tax payments, the French Tax Administration (FTA) has asked for payments for interest and penalties in relation to “the allocation of income between foreign jurisdictions”. Amazon says that it intends to fight the French tax claim.

Many multinationals operating in Europe funnel their tax affairs though the lowest-rated tax countries within the Union. Amazon has its European HQ in Luxembourg, a country which offers lucrative tax breaks for companies based there. Amazon EU Sarl, a reference to which you may see on the little invoice accompanying your Amazon order in the UK, made $9.1 billion revenue last year and only paid $8 million tax in Luxembourg. Despite a turnover of £3.3 billion in the UK last year Amazon paid no corporation tax in the UK at all.

The French are also after more tax from Google, with European headquarters in Ireland (12.5 per cent tax rate), and are rumoured to be drafting a bill for Google for as much as one billion Euros for four years of underpayments. Other companies under the French tax inspectors’ microscopes are reported to be Apple and Microsoft. Incidentally, perhaps frothy coffee-maker Starbucks isn’t as big in France as it is here; it isn’t mentioned in tax dodging reports from across the channel.

Do you think using these tax loopholes to pay little or no tax is fair game?



HEXUS Forums :: 35 Comments

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I think you need to clarify your language between tax evasion and tax avoidance. Tax evasion is the use of illegal methods to reduce ones tax burden. Tax avoidance is the use of legal methods to reduce your tax burden by adhering to the letter of the law, regardless of the spirit or intention of the law. Referring to Amazon et al. as "evading" tax is a very different matter - legally - to referring to them as "avoiding" tax...
Not good news for us consumers or the people that are employed by Amazon. Amazon might not pay much tax but as a result the consumer enjoys some good low prices on pretty much everything they sell plus free postage. As a result of these low prices they have the need for big warehouse and large staffing needs.

I work for a company that exploits tax loop holes. If these holes were closed my job would go to some eastern European country with lower corp tax....

Many people employed in this country are employed by companies they use tax loop holes. If they were forced to pay full whack corporation tax they would simply move.
scaryjim
I think you need to clarify your language between tax evasion and tax avoidance. Tax evasion is the use of illegal methods to reduce ones tax burden. Tax avoidance is the use of legal methods to reduce your tax burden by adhering to the letter of the law, regardless of the spirit or intention of the law. Referring to Amazon et al. as "evading" tax is a very different matter - legally - to referring to them as "avoiding" tax...
Quite correct.

It's a very easy mistake to make, but the difference between "avoid" and "evade" is critical. One is legal (though arguably, as with those examples, immoral) and the other is criminal.
Brewster0101
....

Many people employed in this country are employed by companies they use tax loop holes. If they were forced to pay full whack corporation tax they would simply move.
Some companies no doubt would, or might. Some couldn't. If you want to sell coffee in high street shops to British consumers, you pretty much have to have high street shops in Britain, because Joe Public won't traipse off to Luxembourg or Switzerland every time he/she wants a cup of coffee.
Might as well add eBay and PayPal to that list too.