Amazon dodges $1.5bn US tax bill: It's OK to run sales through Europe out of IRS reach – court

Re: The reason for Blue Origin ?

Either that or "such a nice tax office you have down there, pity if something happens to it if someone's rubbish fails to reenter the atmosphere correctly"

Re: US tax liability

I don't know why we, speaking as non-citizens of the US, put up with it at all.

It used to be called gunboat diplomacy, it is now called aircraft carrier diplomacy.

Why they should pay US tax on that

The US taxes its citizens on worldwide income. If I go to India and work there, I still must file a tax return and pay taxes in the US. Any taxes I paid in India are a credit against my US taxes, but if taxes in India were 20% and my US taxes were 30%, I'd pay 20% of my income to India and 10% of it to the US.

This is why you see US companies like Apple keeping massive piles of cash they earned overseas in accounts overseas. US companies operate under slightly different rules. They owe US taxes on worldwide income, and get credits for foreign taxes paid, just like individuals. However, the money isn't counted as income until it is brought into the US. So long as they leave it overseas, it isn't taxed by the US.

In this case the IRS is saying Amazon is padding their US expenses by having the US company sell services/IP to a non-US subsidiary, to allow them to effectively move profit from the US (where it would be taxed immediately) to outside the US (where it won't be taxed in the US) They can leave it overseas like many US multinationals do, until their corporate lobbyists have successfully bribed Congress to lower the corporate tax rate.

As for you having to sign those forms, sorry about that. We'll tell your government stuff like that is to help prevent terrorism to get them to go along with it, but it is really just because we're bullies and we can't help ourselves.

Re: US tax liability

Brenda, I have no idea why the IRS acts the way it does toward you, when you are neither living nor working in the US...but trust me, count yourself lucky that all they make you do is tick a checkbox on a form.

The IRS is virtually ungoverned, in terms of being accountable to anyone. And they know it.

Re: Other countries?

I think most of the treaties are bi-lateral: the UK has its own tax treaty with the USA.

The way Amazon handles Kindle book publishing means I have to see my money go through the USA and the US tax system., which does make this subsidiary in Luxembourg feel a bit fake.

And I know the EU is getting a bit active about the tax deals, such as VAT rates, that Luxembourg did.

I don't just what all this adds up to, but there's far more questionable behaviour by these big American businesses with subsidiaries in the EU and large fees being paid for IP rights so as to avoid tax, if not outright evade it. It makes this report seem a little inadequate.

(Of course, if the EU is leaning on some countries about how they have set tax rules, it's easy to imagine a motive for some people's attitude to Brexit.)

Re: All in Europe

I can see champagne corks flying in Brussels over this ruling - although the Irish government and Apple might see it differently...

Re: parts of its technology and the trademark

One contra-intuitive solution is to abolish Corporation tax. Also abolish fines and lawsuits against corporations.

A nice, and rather purist idea that I like. I fear there are three reasons that won't work:

1) Most shares are owned by other corporations, banks, insurers etc. Follow through to the beneficial human owners and the majority of personal ownership that you'd tax on would be the world's richest people. That will mean some huge swings in which countries get to keep the tax income, meaning a windfall for places like Switzerland and Bermuda, and loss of tax income for countries where the corporation tax arises now.

2) Even if you say "let the beneficial owner be taxed in the country of incorporation of the dividend payer" that wouldn't be feasible because of the complexity of international and inter-company shareholdings. If you own shares in Aviva here in the UK, they own direct and indirect shareholdings in every country in the world where assets can be formally traded. Consider how would the Bolivians get you to pay personal tax on your share of a dividend paid by a Bolivian mining JV, 50% owned by an Mexican mining company, where the Australian Macquarie group have a 5% stake in the Mexican company, and Aviva happen to have a 2% shareholding in Macquarie as part of a global portfolio allocation out of (making all this up) their Singapore office's emerging markets fund?

3) And the main thing: Governments will never let it happen. The rich and powerful, and fat cat corporations made up of the same people will never allow changes to a system so weak and easily gamed. Will Trump really go after tax dodging corporations, when he's running the White House with family members like the best third world despots, and his cabinet is dripping with billionaires? And sadly, he's the only person with the bloody minded drive to actually do anything - the EU and the remaining Anglophone world are timid and ineffectual when it comes to corporate tax reform.

Re: parts of its technology and the trademark

"Make executives and the board liable for the actions and profits of the company. This becomes obvious considering fines against councils, state owned companies etc."

Well, you could start by fixing that - make the councils and state-owned companies responsible for their own activities, fines etc to be paid from internal budgets, and don't let them push the burden onto their "shareholder", the taxpayer/voter.

Re: Bermuda

A UK approved scam. It's their overseas territory.

I did work for a company in Shannon, Ireland 20 years ago and discovered you had to phone Bermuda for their IT Dept.