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Amazon: £7bn sales, no UK corporation tax


Quillan
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I know some won't like what I am about to say but it does prove the point for the unification of EU tax's etc which would close these loop holes. Certainly I know from reading the papers that companies are not keen on this idea but that's obviously because they are using the the loop holes to make excessive profits without paying tax. It would also create more competitiveness amongst the companies as well as protecting, to some degree, the smaller companies/businesses as they would have to play on same playing field as it were.
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The party that works out how to make Sir Philip Green and Sir Richard Branson pay tax in the UK on the businesses they own here, without losing that businesses, will get my vote.

( Perhaps a pre requisite of being a 'Sir' should be that you pay all your taxes in the UK !)

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I think it's simpler than that RH. First you need to set a sensible monetary limit on turnover in a country. Next you bring in a law that says if you sell your product in a specific country then you must pay tax on your profits in that country which you target your sales activity and to where your goods are sold and sent. Now Amazon clearly target particular countries, you can tell by their country specific website address i.e. .co.uk and .fr for example. So anything sold through .co.uk gets taxed on the profit in the UK and if it's a .fr then in France etc. Basically ban offshore selling.
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I'm afraid this is nothing new. Try Googling the two phrases "trading in the UK" "trading with the UK" together, and look at some of the 2.7 million hits you'll get - the issue dates back to the very early years of UK income tax. In fact at one time it was suggested that a chapter in Magna Carta had a bearing on the issue. OK, for those of an inquiring mind, it was this one:

Omnes mercatores habeant salvum et securum

exire de Anglia, et venire in Angliam, et morari et ire per Angliam, tam

per terram quam per aquam, ad emendum et vendendum, sine omnibus malis

toltis, per antiquas et rectas consuetudines, preterquam in tempore

gwerre, et si sint de terra contra nos gwerrina; et si tales inveniantur

in terra nostra in principio gwerre, attachientur sine dampno corporum

et rerum, donec sciatur a nobis vel capitali justiciario nostro quomodo

mercatores terre nostre tractentur, qui tunc invenientur in terra contra

nos gwerrina; et si nostri salvi sint ibi, alii salvi sint in terra

nostra.

Or in English:

All merchants shall have safe and secure exit from England, and entry to

England, with the right to tarry there and to move about as well by

land as by water, for buying and selling by the ancient and right

customs, quit from all evil tolls, except (in time of war) such

merchants as are of the land at war with us. And if such are found in

our land at the beginning of the war, they shall be detained, without

injury to their bodies or goods, until information be received by us, or

by our chief justiciar, how the merchants of our land found in the land

at war with us are treated; and if our men are safe there, the others

shall be safe in our land.

Not the second bit, obviously, though even that seems more liberal than the UK's more recent ways of dealing with foreigners in time of war.

More recently, here's what HMRC has to say about people who are "trading with the UK", without trading "in" the UK ...... and try following the additional links on the page too.

But I don't think it is easily susceptible to any "simple fix".

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First, yes, all companies should pay the appropriate amount, but if they do not it is only because the regulations permit it.

However, there is no such thing as a tax haven, it is a myth. There are only jurisdictions which operate on different regulations, so that bullying and abolishing them, as has happened by some States recently, is a nonsense, largely brought about by the needs of badly managed countries to squeeze more and more money from their economies. Instead of getting down to the serious business of spending the citizens money efficiently and reasonably by stamping out corruption and bad practices.

Cross border trade forces inefficient traders to rethink their selling policies and pricing, or go bust, and should not be restricted. Protectionism, which is an offspring of nationalism, the opposite side of the coin, is ugly and seldom succeeds in the long run.

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[quote user="woolybanana"]

First, yes, all companies should pay the appropriate amount, but if they do not it is only because the regulations permit it.

[/quote]

This is exactly the reason, one of many, why we need a Federal Europe. Europe needs to learn from the US and adopt a system that is somewhat similar but with all the 'bad bits' removed (health care being a typical example). The way the EU functions with its grants, the way it collects it's money etc needs to be sorted out and controlled a lot better.

The first requirement is for elections for the President and then other senior officials. All this stuff about different countries taking their 'turn' is a load of rubbish, no wonder nothing gets done and people shout corruption. You can't have a president who, when in office, forces laws through for solely the benefit of their own country. We should have a federal tax which encompasses all companies that operate within the EU and the proceeds used across the EU more evenly, honestly and to the benefit of all that live in it. Countries, or member states as they are often referred to should also be able to raise their own 'state' tax from which that state benefits from. The percentage of state tax should be capped by the EU. Most importantly of course is their must be accountability also a clear and controlled central budget.

I appreciate that some will not agree with a Federal Europe but when you sit down and think about it then it becomes obvious that it is the only way to go and would make things so much simpler.

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Good on any company or individual that pays the least tax that is legally allowed.

 

The economy is being suffocated by government interference (taxation). I have no doubt that the company and its shareholders will put the money to more productive uses than any government department ever will.

 

The net result is the creation of non jobs that are sold as vital to the economy, and illogical subsidies.   

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[quote user="Quillan"]I think it's simpler than that RH. First you need to set a sensible monetary limit on turnover in a country... Next you bring in a law that says if you sell your product in a specific country then you must pay tax on your profits in that country which you target your sales activity and to where your goods are sold and sent... [/quote]

Quillan, I'm afraid it's not as simple as that.  Your suggestion is based on the idea of profit, but measuring profit in an international group depends on the price at which things should be sold from one company to another, and that's a pretty complicated question – the subject is called "transfer pricing" and it creates lots of work for tax lawyers.

Anyway, who would set the "sensible monetary limit on turnover"?  Some bureaucrat?  If you built up a successful business, would you reach a point where someone would say "sorry, you're over your sensible monetary limit, you have to reduce your sales now"?  I can't see how that would work, but if it did, it would keep potential investors away like the plague.    

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Well for a start the EU has pretty strict rules on the content of a product to enable it to be called and EU product and therefore free of import duty. This is good for the EU inhabitants as it creates jobs. As a basic example look at Nissan. There are a lot of small companies making seats, widgets etc in the UK and other EU countries that go in to the cars and as such they are EU cars so no import tax levied within the EU. One of the main reasons Nisan set up shop in the UK, to get round paying import tax within the EU.

Where I was coming from with the tax is take a business like myself dealing with people from all over the EU (and beyond). It would be very difficult for me to pay tax to all the countries I get guests from and it would cost the EU more than the tax recovered. This is why you would need some sensible limits. On the other hand big companies clearly targeting a country, like Amazon does the UK, should pay tax on it's UK sales profit in the UK regardless of what EU country they based in.

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The problem with this idea ,Q, is that it locks in the worst excesses of the most irresponsible governments and follows the worst of systems. The French see Europe following their models and the Germans theirs, but both are seriously flawed and would lead to lack of competition, lower wages and heavy taxation which are precisely why Europe is the sick man of the world when it comes to creating new jobs, developing its economies and encouraging useful growth. The most obvious examplesz from France are the hideously inflated numbers of people being paid from the public purse whether directly or indirectly and the overwheening bullying and lack of responsibility of the state, and in Germany would be the vast numbers of people being paid very low wages and the national contempt for other countries economies.
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Quillan, I don't understand your point about turnover limits.  Suppose that you became internationally successful in the hospitality business: imagine "Quillan International Guest Houses", with establishments in a dozen European countries.  If your style wasn't attracting much business in Germany or Holland but became wildly popular in Spain, why on earth should anyone have the right to limit the growth of your business in Spain?

This has nothing to do with the fair measurement of profit in each country – which, I still believe, is more complicated than you think.  Maybe less difficult in a service industry than in manufacturing, but still difficult.

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