Re:Amazon snubs French free delivery ban with one-cent charge
by mpweiher on Saturday July 12, 2014 @01:29PM
(#8025159)
It's actually quite easy to evade taxes on money earned in a particular country, as you are allowed to subtract inputs from your tax burden.
So the French subsidiary buys very expensive inputs from the Luxembourg subsidiary, meaning the French subsidiary doesn't show a profit, mon dieu how could that have happened, such a shame!
Fortunately, the Luxembourg subsidiary is very profitable, exclusively from "sales" to the French subsidiary.
Obviously all of this typically happens only on paper.
Re:Amazon snubs French free delivery ban with one-cent charge
by moe on Saturday July 12, 2014 @03:57PM
(#8025635)
This is worth clarifying because all multi-nationals operate that way.
Say Starbucks-France makes 10 billion in profit in a year.
Then that year Starbucks-Luxembourg will send it an invoice saying "You owe us 10 billion for a license to use the name Starbucks".
That way SB-France, on paper, made no profit and pays no income tax.
What actually happens is that Amazon makes no profit, and thus does not get taxed on profits. But it still pays VAT, Property, B&O, etc.