French Government Thinks Amazon Is Too Customer Friendly

[Canuck_in_Japan]

Inaccurate thread title is inaccurate.

[MattW]

Originally Posted by HarryT

No they don't. They practice tax AVOIDANCE - as does every large company. Tax AVOIDANCE (paying the minimum amount of tax that the law permits) is entirely different to tax EVASION, which is the illegal non-payment of taxes.

That's correct. But the border where tax avoidance turns into tax evasion isn't as clear-cut as one might think; what a company thinks might just be very clever accounting practices, a prosecutor might think constitutes tax evasion.

The government is free to sue, you might say, and you're right, but it usually doesn't because more often than not that would mean cutting off its own arm to save its hand (see the US treatment of illegal behaviour by HSBC; by claiming the bank is too important and would have to be closed down if prosecuted, they say they "had to let it get away"). And more often than not, closing a tax loophole isn't possible at all, because said loophole only exists because a multinational like Amazon bases its headquaters in another country, thereby avoiding local jurisdiction outright (Amazon didn't own distribution centers in US states where it would have to pay sales tax for a very long time, to give an example for the US alone).

Playing out tax laws of various countries against each other basically guarantees a multinational that it can get away with an amount of tax avoidance that simply was never the intention of any single government. Your solution seems to be to do nothing or change the whole system in each and every country in sync. That's not a solution at all.

And so when the "tax loopholes" persist because lobbying (to the tune of millions) goes a step beyond legal (and don't tell me this isn't happening constantly) and because it just isn't feasible to change the tax codes in dozens of countries in sync, that means that governments have to use other means to protect the local economy from foreign multinationals. And that's what the French government is trying to do here (a bit clumsily); the same thing that the US government does all the time (punituve tarriffs on certain goods from Asia, for example).

So please spare us the righteous indignation. In an imperfect world where it's sometimes not possible to right a perceived wrong, you have to make do with what you can actually achieve.

Now you can stand on your high horse and proclaim that Amazon isn't doing anything that every tax payer isn't doing, too; or you could honestly admit that the system is broken and broken in ways that are beyond (easy) repair. And since it's the government perogative to pass new laws, why shouldn't the French do exactly that? If Amazon is free to do anything legal in their power to avoid paying taxes, shouldn't, by the same logic, the government be allowed to do everything in its power to collect taxes?

If Amazon doesn't like it, it is, of course free to leave the French market. And if the French people don't like it, they're free to elect a different government (as they have done in the past).

So, it's all fine, isn't it?

[elcreative]

Originally Posted by Canuck_in_Japan

Inaccurate thread title is inaccurate.

Funny, I've been thinking this as well... I mean having "Thinks" and "French Government" together seems too be stretching credulity beyond its limits...
Although, to be fair, you could remove the "French" from my comment and it would still be accurate...

[HarryT]

Originally Posted by MattW

Playing out tax laws of various countries against each other basically guarantees a multinational that it can get away with an amount of tax avoidance that simply was never the intention of any single government. Your solution seems to be to do nothing or change the whole system in each and every country in sync. That's not a solution at all.

I'm not sure what you mean by "your solution". I haven't proposed any solution.

[MattW]

Originally Posted by HarryT

I'm not sure what you mean by "your solution". I haven't proposed any solution.

By endorsing Amazon's right to all kinds of tax avoidance, you kind of have, implicitly.

[HarryT]

Originally Posted by MattW

By endorsing Amazon's right to all kinds of tax avoidance, you kind of have, implicitly.

No, you misunderstand me. I'm saying that it's hypocritical to criticise someone for "only" paying the amount of tax that the law requires them to, if you do the same thing yourself. If you think the law is unfair, then it's the law that needs to change, not the people who obey it.

[Ansileran]

I don't exactly see what all the fuss is about. Without even changing the law, Amazon could actually be condemned for its free shipping practice on books (combined with the 5% discount).

As was said before, book prices are set by the publisher (in France) and prices may only be discounted up to 5%. Shipping the book costs money, however you choose to ship it and no matter how efficient you delivery service is. Even if that cost is reduced to the minimum, it's still not free. So, to offer free shipping, Amazon is either making deficit sales (not sure the term is correct in English), which is illegal in France except in specific circumstances, or offering a hidden discount on books... This of course doesn't concern e-books, which aren't shipped.

Government is probably citing Amazon because it's easier to convince people to act against a foreign corporation than a national one. If they want to take action however, they will have to include the "Fnac" which does exactly the same thing through it's website...

[samhy]

Originally Posted by Ansileran

Without even changing the law, Amazon could actually be condemned for its free shipping practice on books (combined with the 5% discount).

But Amazon is not the only one. FNAC for example has free shipping too (maybe not for all the books though) and if you have the FNAC card you get the 5% discount. I need to check, but I'm pretty sure that other online stores have free shipping as well.

[Rizla]

Amazon pays no or next-to-no corporate tax on massive sales and profits. I applaud the French government's stand against Amazon's hugely immoral tax-avoidance policy. It is deeply saddening that the governments of the UK and the USA allow these near-criminal practices to continue.

[JD Gumby]

Originally Posted by Ansileran

So, to offer free shipping, Amazon is either making deficit sales (not sure the term is correct in English), which is illegal in France except in specific circumstances, or offering a hidden discount on books...

Or, more likely, they're using up the same part of the price that physical chain book stores use to cover shipping to their own storefronts (as well as carriage, of course - have to account for the book sitting there on the shelf for a while instead of something that might sell immediately).

Originally Posted by Rizla

It is deeply saddening that the governments of the UK and the USA allow these perfectly legal to continue.

There, fixed that for you. Whatever your opinion is of their morality, the facts are that they are operating within the law when it comes to how much and where to pay taxes.

The only way to fix things, in a non-discriminatory manner, would be to change tax laws and legal definitions of corporations so that there are no such things as subsidiaries - that regardless of the corporation's internal operating structure, all monies earned and taxes owed from operations within your national territories are counted against the parent company, no matter which jurisdiction they stash the money.

This, of course, will never happen as no politician (with any real influence) is going to offend their post-political career employers to such an extent.

[HarryT]

Originally Posted by Rizla

Amazon pays no or next-to-no corporate tax on massive sales and profits. I applaud the French government's stand against Amazon's hugely immoral tax-avoidance policy. It is deeply saddening that the governments of the UK and the USA allow these near-criminal practices to continue.

The UK government has no choice in the matter; it has to abide by EU tax law, which makes it perfectly legal to move profits between EU member states. This is something that was discussed in the recent G8 Summit meeting in Northern Ireland. But unless or until EU law is changed, I strongly disagree with your assertion that it's "near-criminal" to act in accordance with the law. Blame the law, not the people who obey it.

[soulfuldog]

Of course it is the law that needs to be fixed, not the culture of paying as little tax as possible, and that is all Amazon, Starbucks, Boots, Topshop, Apple and just about every other major business are doing. The Governments have let the situation develop (I wonder how many politicians employ accountants who, as a routine part of their work, look for ways for them to pay less tax, or who are shareholders of companies and quite enjoy the dividends?), it's up to them to do something to fix it instead of making lots of noise and making fairly pointless changes.

In an ideal world they and everyone else would maybe feel morally obliged to pay as much tax as the Government wanted, but that's pie in the sky. The bottom line is they are not doing anything legally wrong, all they are doing is making their respective owners, shareholders etc as much money as possible.

[Cyberman tM]

Originally Posted by Rizla

Amazon pays no or next-to-no corporate tax on massive sales and profits. I applaud the French government's stand against Amazon's hugely immoral tax-avoidance policy.

So you applaud that a government is specifically targetting single entities and intends to harass them for abiding the law.
Nice.

Bullying is easy, that's nothing new. Applauding it is even lower, though.

If they (those who want that law) would want to change something, they should try to change the system that allows those loopholes. But of course, that would be work. Singling out a scapegoat is far easier - and makes for better PR...


Besides, what exactly is this going to solve? It doesn't even solve the problem of tax-avoidance, so at worst Amazon has to change absolutely nothing and still avoid paying too much tax.

[pl001]

I find the practices of Amazon customers to typically be just as questionable as Amazon itself. Customers usually do not pay local taxes on their purchases. Just because Amazon does not collect them does not mean you don't have to pay them.

My biggest issue with Amazon right now is how many knock-offs are being passed off as OEM products. It's getting as bad as eBay, where you can't trust what you buy is what you will receive.

[murraypaul]

Originally Posted by pl001

I find the practices of Amazon customers to typically be just as questionable as Amazon itself. Customers usually do not pay local taxes on their purchases. Just because Amazon does not collect them does not mean you don't have to pay them.

That is a peculiarly US issue. It doesn't affect Amazon in Europe.