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Tax Evasion Amazon

In: Business and Management

Submitted By s22875655
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Tax Evasion
In fact, for Amazon the transfers of profits, tax avoidance or even tax evasion are common practices in their multinational operations. The bigger the company is, the more overseas set point, it will use more ways to tax evasion. For exemple, for the companies, R & D base and branch offices are throughout the world and that help them to implement easily tax evasion.
On the other hand, some countries and regions also specifically set up some duty-free zone, introduced a number of policies to attract multinational companies to settle, in order to create jobs and increase revenue. An other point is corporate tax rate: in UK it’s reaching 24% and it’s even more in France (more than 33%); this is also a reason for Amazon to do tax evasion.
In the wake of the financial crisis, the governments are more concerned about the phenomenon of tax evasion, hoping to block the loopholes. For exemple, the PIC of British parliamentary public accounts committee, Ms. Hodge pointed out that the citizen complain that tax evasion is unfair, especially under the current economic situation. We can understand that tax issue with Amazon make them save a lot of money but in the same time it’s creat a bad reputation with some customer who are asked to pay more and more tax every years.
Financial circles also have views on this phenomenon. They think current system has been unable to act as a restraint on the company for the tax issue, and it almost became a voluntary tax. They suggest using Sales Tax instead of Company VAT to solve the problem. In the other hand there are many countries which attract investment by adopting tax relief. And also some countries don’t want to introduce more stringent tax regime because they afraid of investment loss. On this issue, it should strengthen international collaboration.EU has recommended that the Member State to intergrade the tax system in order to avoid tax evasion and the situation will became more complex for Amazon. Also some pressure will be put on the lower tax rate countries such as Luxembourg, Netherlands and Ireland. We can easily think that the "vicious tax competition" will be intensified.…...

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