One for the economists.

Danthus · 8 Jan 2014 at 22:59

As we all know the likes of Amazon get away with paying tax because of where they are based.

Would it not be possible to tax them based on the value of where the goods are delivered?

Jokester · 8 Jan 2014 at 23:00

That's called VAT.

Edit: Though technically that's the value of the good where sold in the EU.

Destination · 8 Jan 2014 at 23:01

Yes vat
It would work nicely if the govt wished to try it but the consumer would complain as they would feel it was 'their' tax.

Dave M · 8 Jan 2014 at 23:03

Jokester said:
That's called VAT.

Edit: Though technically that's the value of the good where sold in the EU.

Oh if it was so simple

Russinating · 8 Jan 2014 at 23:04

Do you realise how complex that would be for a multinational company? Hell, even a small company selling abroad.

Can you imagine Coca Cola working out how much tax they owed each country.

Danthus · 8 Jan 2014 at 23:06

Russinating said:
Do you realise how complex that would be for a multinational company? Hell, even a small company selling abroad.

Can you imagine Coca Cola working out how much tax they owed each country.

Don't they do exactly that now, work out what though owe in each country?

Theophany · 8 Jan 2014 at 23:14

This isn't really an economics question. It's much more a politics and tax code question.

Theophany · 8 Jan 2014 at 23:24

Moses said:
It's an international law question, really. If someone really wants to look at the OECD model tax guidelines, or all of the UK's taxation treaties with other states (or any state with any other state), they can go crazy,

http://www.hmrc.gov.uk/taxtreaties/in-force/index.htm

Yes. Because law comes into force without politics. Point or pedantry?

PMKeates · 8 Jan 2014 at 23:36

Moses said:
Well, you can reduce everything down to politics... or at least a lot... which arguably means reducing stuff that far is pointless. Whereas tax is very much an international law issue/that's the most specific crux of the whole tax issue. International tax, which is what all this transfer pricing malarkey is about, is basically to do with what all the different bilateral tax treaties result in - and that's just international law.

And when people say it's just politics, many people (and not necessarily you from what you said... just in general) spack out and say Westminster aren't doing enough to combat tax avoidance, blah blah blah... but it's not a 'normal politics' issue... it's an international law issue which Westminster basically can't do anything about!

Who created the bilateral tax treaties?

Nitefly · 8 Jan 2014 at 23:38

Jokester said:
That's called VAT.

Edit: Though technically that's the value of the good where sold in the EU.

VAT is always passed on to the consumer of the end goods / services, so not sure I follow you!

beamer · 9 Jan 2014 at 02:16

Of course, otherwise they might accidentally pay more to avoid paying tax than the amount they actually owe ;0)

OldCoals said:
Don't they do exactly that now, work out what though owe in each country?

Jokester · 9 Jan 2014 at 12:12

Nitefly said:
VAT is always passed on to the consumer of the end goods / services, so not sure I follow you!

VAT IS a tax on the value of the goods. Fundamentally all the taxes a company pays come from their consumers, nobody else is going to give them the money!

pitchfork · 9 Jan 2014 at 12:17

There are dozens of ways to completely stamp out tax avoidance, but given all our politicians are corrupt *******s claiming everything back on expenses and avoiding the same taxes, they'll continue to let foreign companies drain our economy dry whilst cutting vital public services and raising the taxation on hard working people, because funnily enough there's no public money...

They'll always say "well if we cut tax the companies will just leave"

Good riddance, if they don't like it then they can **** off, get some British firms in the market.

kaiowas · 9 Jan 2014 at 12:33

Isn't that the point of import taxes? At some point the goods have to be imported (unless it's stuff that's made here). Doesn't matter who's selling it then, tax it on importation and the government will get it's cut.

grumpysculler · 9 Jan 2014 at 13:15

ITYM Amazon gets away with not paying taxes because it doesn't make any profit. Net income in 2012 was $-39m

Bezos is on record somewhere as saying that, basically, if they make a profit then that means their margins are too big or they aren't expanding enough.

Skidder · 9 Jan 2014 at 13:26

As an economist, I have no idea, you would want to ask a lawyer, an accountant, a political scientist and a better informed economist.