Amazon and Tax-Avoidance: Is it immoral to buy amazon?

[Rizla]

I meant to change the title to Amazon and Tax-Avoidance: Is it Immoral? Too late now, I think.

Amazon's billion-dollar tax shield

Amazon accused of using tax loophole

Amazon's Luxembourg arrangements have deprived European governments of hundreds of millions of dollars in tax...accounts filed by 25 Amazon units in six countries shows how they also allowed the company to avoid paying more tax in the United States..

In effect, Amazon used inter-company payments to form a tax shield for the group, behind which it has accumulated $2 billion to help finance its expansion.

Amazon and tax-avoidance. It's legal, but is it moral? Should we be buying goods from a company that is profiting from tax-avoidance to the tune of $2,000,000,000? I pay my taxes. Why isn't Amazon?

[HarryT]

If you don't like it, campaign for the law to be changed. You can hardly blame Amazon for employing entirely legal methods to minimise their tax bill. That's what they employ accountants for. Heck, that's what I employ an accountant for!

[Rizla]

Indeed, our governments should put a stop to it. But do you think it's moral?

[HarryT]

I think it's neither moral nor immoral. They are obeying the law, and that's as far as it goes. We all pay the taxes that the law requires us to; few of us would volunteer to pay more.

[jgaiser]

You bet Harry. As a semi-retired private citizen, I use *every* little thing I can do to reduce my tax burden. I don't consider that immoral and neither do I consider Amazon to be immoral.

[Rizla]

Originally Posted by HarryT

I think it's neither moral nor immoral. They are obeying the law, and that's as far as it goes. We all pay the taxes that the law requires us to; few of us would volunteer to pay more.

So do you agree with a practice which you acknowledge is amoral? Which is to say without morals?

IMO a large company paying a reasonable level of taxation in a democracy is a moral practice. Those taxes contribute to the general health of the democracy.

[Rizla]

Originally Posted by jgaiser

You bet Harry. As a semi-retired private citizen, I use *every* little thing I can do to reduce my tax burden. I don't consider that immoral and neither do I consider Amazon to be immoral.

Presumably you saved a lot less than Amazon. In the real world that makes a difference.

[HarryT]

Originally Posted by Rizla

So do you are agree with a practice which you acknowledge is amoral? Which is to say without morals?

When I drive at 30MPH in a 30MPH zone I don't consider the moral implications of doing so - I simply obey the law. When I pay the taxes that my accountant tells me I need to, and no more, I don't consider the moral implications of that - I simply obey the law. The law is the law. I'll leave the morals to the theologians.

[HarryT]

Originally Posted by Rizla

Presumably you saved a lot less than Amazon. In the real world that makes a difference.

Do YOU voluntarily pay more tax than the law requires you to, Rizla? If (as I suspect) you don't, you're hardly in a position to criticize Amazon for doing the same!

[pdurrant]

The EU VAT situation is entirely a thing of the various EU governments' own making.

They introduced a law saying the non-EU companies selling electronic goods into the EU must collect and pay VAT on the goods.

But then they don't say that for inter-EU sales, companies must collect and pay VAT based on the customers' home address.

This naturally leads companies to set up in the EU country with the lowest VAT rates on the electronic goods they want to sell. In the case of Amazon and ebooks, that's Luxembourg, with 3%.


As for multi-national companies setting up subsidiaries in low-tax countries and using complicated licensing deals to avoid paying tax on profit in the countries in which it's earned: Any government could stop, or at least minimise this, by introducing a law that says that multinational subsidiaries must pay a minimum percentage of revenue, or the tax rate percentage on profit, whichever is higher.

But it's not immoral to buy from companies that take advantage of these problems with tax law.

[HarryT]

Originally Posted by pdurrant

But it's not immoral to buy from companies that take advantage of these problems with tax law.

And it should be noted that when Luxembourg lowered their VAT rate on ebooks, the price of most ebooks at Amazon UK fell.

[JoeD]

Originally Posted by HarryT

If you don't like it, campaign for the law to be changed. You can hardly blame Amazon for employing entirely legal methods to minimise their tax bill. That's what they employ accountants for. Heck, that's what I employ an accountant for!

That's exactly what I thought when the stink started in the national papers. Companies just like individuals will do what they can to lower their taxable income. I see no problem with that as long as the actions they take are legal.

Also, afaik any "scheme" that is used to lower a companies taxable income has to be declared to HMRC (I believe it's them and I'm not certain of the specifics, just remember reading about it when there was a stink about a scheme a few years back). In which case they can adjust laws if they believe a currently legal avoidance scheme should be made illegal.

Laws just need to catch up to the digital way of doing things.

Now if Amazon were found to be evading tax, that's a different matter.

Is it really any more immoral than those of us who bought ebooks and other digital items from a country with a lower VAT rate than the UKs VAT rate to save ourselves some money? If the public or governments want to collect VAT on anything customers living in _their_ country buy, then the EU needs to change their laws accordingly (I believe something like that is in the works too).

I don't think morality really comes into this discussion (unlike a discussion of say fair trade where I can see morality playing a part).

[Lemurion]

Tax Avoidance is not Tax Evasion.

Not everything is a moral question.

[Rizla]

Originally Posted by HarryT

When I drive at 30MPH in a 30MPH zone I don't consider the moral implications of doing so - I simply obey the law. When I pay the taxes that my accountant tells me I need to, and no more, I don't consider the moral implications of that - I simply obey the law. The law is the law. I'll leave the morals to the theologians.

I drive at or below the speed-limit for fear that a child or animal may step into the path of my vehicle. For me, it is a very moral issue. Morals for me has little to do with theologians. It is all about a desire to respect others.

[Rizla]

Originally Posted by HarryT

Do YOU voluntarily pay more tax than the law requires you to, Rizla? If (as I suspect) you don't, you're hardly in a position to criticize Amazon for doing the same!

No, I don't. But I don't avoid more tax than the guy next to me who is also making a living. We both contribute to society. We play by the same set of rules. Amazon is not doing that. They are avoiding more tax than other comparable companies.