News - Amazon UK opens download store for PC software and games

[Odeas]

If they were that bothered about them they'd close the loopholes that they're using.
Until then the amount of tax they pay is legal and correct and they're not going to pay more for the sake of it for the few people who feel strongly enough not to buy from them.

More on topic I recently bought BF3 Premium for £10 from the Amazon US download site.
Worked perfectly well, and provided Origin codes. As others have said, unless its on sale at steam/origin the prices are expensive for a download game.

[Andeh13]

God damnit.

Why is it all these people feel the need to go tubthumping about not paying the tax. They are paying the legal minimum they need to. Just like I do.

Did I demand the £10k that HMRC made me overpay them to be refunded? Hell yes I bloody well did.

I also find it funny how the last person I met in real life moaning about these companies, bought their digital camera from a Hong Kong merchant because it was cheaper... Hmm.

I can't help but feel its Champaign socialist grade hypocrisy going on. This is before we even get started on Corporation Tax been a nasty, regressive pointless tax. It appears to be all about appeasing the dumb.

Couldn't agree more!

I am so so hacked off these days, every issue i hear seems to stem from the Daily Mail's knee jerk, headline grabbing, bull**** articles that so many people lap up - including the Tories (This from a Tory voter!).

First forcing all ISPs to block all porn thinking it will prevent a whole generation of peados, rapists and sexual predators and then again prat-faced David Cameron stands up to proclaim we should all boycott 'websites that allow bullying' ..... how totally technologically retarded is he!?

SHUT UP YOU STUPID MAN AND HANDLE THE REAL ISSUES!

[crossy]

They might be able to argue they're acting legally, but if enough of their customers got sufficiently pee'd off and boycotted them, they'd change their attitude right quick.

Anyone that moans about these companies that have been so prominently outed for tax shenanigans but still buys from them because they're cheaper than others is, I'm afraid, both a hypocrite and part of the problem

I still buy from Amazon et al, but I'm trying to reduce the amount of trade I give them - hence my initial comment about not being that bothered about an Amazon Download store. On reflection though, while I might not give them any games business, perhaps the odd utility might get bought if they're the only one offering it on download.

[Funkstar]

As well as the whole UK tax thing there is also the fact that the whole of the Amazon corporation still makes very little money and often a loss because of the amount they spend on infrastructure and expanding the company.

[TheAnimus]

I still buy from Amazon et al, but I'm trying to reduce the amount of trade I give them - hence my initial comment about not being that bothered about an Amazon Download store. On reflection though, while I might not give them any games business, perhaps the odd utility might get bought if they're the only one offering it on download.

So this is about corporation tax. Do you know how little profit Amazon makes?

It's tiny. It's less than a fraction of a fraction of a fraction of a percent of any item they have sold you. Meanwhile, most of the purchases will have had a 20% tax slapped on called VAT. Hell they've reported losses lately, so wouldn't pay any tax.

If you want to boycott something for not paying tax. Try the Guardian. They are exempt from VAT too. So ultimately they pay pretty much nothing back to the country.

[cjs150]

Saracen: what companies such as Amazon do is not only in accordance with the law, it is also how the law was meant to work. Transfer pricing rules are not there to assist in tax dodging but are a tool to prevent companies moving profits/losses around group companies to minimise tax.

The truth is that the only difference now compared to 100 years ago is that import duties on physical goods are a lot lower (and non-existent within EU) and of course a lot of what we order is not even in physical form (so virtually impossible to tax). Politicians forget that 100 years ago you could have ordered goods from abroad by telegram in the same way you now order them over the internet. Indeed the very rich of Edwardian England frequently did that.

This is not to say the tax laws are perfect but the basic principles of corporation tax as put in place 50+ years ago remain, in my view, correct

[crossy]

So this is about corporation tax. Do you know how little profit Amazon makes? It's tiny. It's less than a fraction of a fraction of a fraction of a percent of any item they have sold you. Meanwhile, most of the purchases will have had a 20% tax slapped on called VAT. Hell they've reported losses lately, so wouldn't pay any tax.

First off, I didn't say that I necessarily disagreed what they were doing wrt tax - in the scheme of things they're probably not the worst "offender" anyway. What I said was that they had an "interesting" approach to tax - the offloading stuff to what some have claimed is merely a holding company in Lichtenstein etc. If you don't find that worthy of the description 'interesting' then fine.

As to Amazon's profits - not interested unless I had some shares, which I don't. And don't get me started on HMRC ...

If you want to boycott something for not paying tax. Try the Guardian. They are exempt from VAT too. So ultimately they pay pretty much nothing back to the country.

Easy to "boycott" the Gruniad - never bought it anyway. In fact, I can probably count the number of daily newspapers I've bought as less than a dozen ... ever. That said, I'm less than impressed with boycotting as a technique against companies - I suspect bad reputation in social media is a lot more effective these days.

I've had this argument with folks about plunging all their trade into one company before. I personally prefer to spread my meagre business around if possible - buying games from GAME and Steam; music from Amazon (mainly) and in the past HMV; books from Amazon (again) and Waterstones. Which made it a bit annoying recently to have two separate folk look at me as if I was the village idiot because I didn't buy the things in question from Tesco/Amazon respectively.

Given I've spent easily more than £100 on Kindle books since November, I doubt very much that they (Amazon) would even notice my lack of interest in the PC Software centre, never mind be effected by it.

And getting back to the topic of the article, namely the Amazon Software Store, I wonder how they're going to deliver it. The MP3 store uses a dedicated app, as does the App store. In which case, there's potentially yet another store front end to contend with, to go along with Steam, uPlay and Origin.

[Chadders87]

Another provider of digital downlaods is always welcome. It's another stream to explore during "Sale" periods and will give me more chance to pick up a game I want at a price I want to pay.

Although, they havn't specified whether it will be like other Amazon services, i.e. is it advert intense, DRM protected to only work on Amazon PC's, and is the method of delivery slow and prone to hiccups?

[OilSheikh]

[kalniel]

Derailment.jpg

You did read the post above yours right?

[Saracen]

Saracen: what companies such as Amazon do is not only in accordance with the law, it is also how the law was meant to work. Transfer pricing rules are not there to assist in tax dodging but are a tool to prevent companies moving profits/losses around group companies to minimise tax.

The truth is that the only difference now compared to 100 years ago is that import duties on physical goods are a lot lower (and non-existent within EU) and of course a lot of what we order is not even in physical form (so virtually impossible to tax). Politicians forget that 100 years ago you could have ordered goods from abroad by telegram in the same way you now order them over the internet. Indeed the very rich of Edwardian England frequently did that.

This is not to say the tax laws are perfect but the basic principles of corporation tax as put in place 50+ years ago remain, in my view, correct

I don't agree that how some companies are using them is how they're meant to work, but entirely agree that transfer pricing serves a legitimate purpose.

The idea is that, simply put, corporation tax is a tax on corporate activity, as measured by profitability. The trouble is, that basic premise is hugely naive in it's simplicity and the world, even 100 years ago, let alone now, isn't that simple.

For a start, as you and I both know, "profit" is a moveable target and tax isn't based on gross profit. So, we have a vast array of things that get deducted, from obvious operating costs like staff costs, utilities, etc, to a slew of allowances for everything from capital spending to various special interest exemptions.

So .... it becomes a complex game working out just what was intended by the tax system. For instance, many companies can reduce, hugely reduce or even eliminate corp tax liability completely IF the reinvest sufficiently, and that of course helps exosnsion, job creation and so on.

So, it's a perfectly valid argument, as some have already said, that not paying corp tax, year after year, is not necessarily a bad thing.

Say, for example, I open up, oh I don't know, a coffee shop. I employ three people and rent a shop, serve wonderful coffee and do well. So, I pay myself minimally, and open a second shop. Three more staff, more great coffee, and more profit. But all the profit from shop 1 went into costs of starting shop 2. So no corp tax, because net profit at year end was, well, a small loss.

Next year, profits from 1 and 2 fund opening 3 through 5. The year after, profits from 1 through 5 fund 6 through 14. Next year, I have 30 branches, then 60, then 110, then .... and so on. Eventually I have a national chain, employ several thousand people and still, quite jystifiably, haven't paid any corporation tax. The country, and government, have benefitted from jobs, and both lots of NI, and VAT receipts, etc, as someone (Animus, I think) pointed out.

And, so far, those capital allowances, etc, have worked exactly as intended, which is to encourage investment, and risk-taking, and growth, via the tax system.

But now, I'm big enough to be international, so I open a notional holding company in Luxembourg, and an office which is basically a PO box at a lawyers or company admin firm's offices, and buy all my coffee and supplies via that firm, with prices set at a level designed to ensure I pay no corp tax in the UK because I can pay it at a far lower rate in Luxembourg (or wherever).

Double tax agreements, that facilitate this, were designed to ease the flow of international trade for multinationals, and are supposed to ensure that tax is paid where the economic activity actually occurs. They're not designed to allow tax schemes that move profits from a (relatively) high tax jurisdiction to a relatively low one, entirely artificially, with NO change to where economic activity actually rakes place, and where the "office" of the "HQ" is essentially a legal fiction.

It's entirely legal, but not what was intended. It is also due, in no small part, to jurisdictions where they figure a small percentage on corporate profits in large areas, like the UK, is worth more to the local exchequer than a higher percentage on their local business. So, as the finance minister of a small state, I get a lot more revenue out of, say, 8% of billions in trade abroad than I do out of 25% on local profits, so I'm happy to lose 17% tax on local profits because I get 10 times that in revenue from 8% on all this new international business, even though NONE of the economic activity it relates to takes place in my little state. The double tax agreements should have seen this coming, and planned for it.

It's a kick in the balls for the customers/taxpayers where these companies do do business, and now that those customers/taxpayers have had their noses rubbed in it by all the publicity, they're starting to get annoyed about it. It's terribly bad PR.

And customers do have the ability to put a stop to it, IF they vote with their feet. I'm just not holding my breath waiting for that to happen.

Personally, I haven't been in a Starbucks since this blew up, and have no plans to in the future. I'm not a heavy coffee-shop customer anyway, probably going in maybe twice or three times a month, but that business has now diverted to a small, local shop, which is not only cheaper but both the coffee and cakes are FAR better. And beyond that, when away, I make do with a thermos, or bottled water or fruit juice. I'll bet that small, local, owner-managed coffee shop hasn't got a Luxembourg HQ.

[KeyboardDemon]

I like it it gives me more choice, more options so I can pick the best price when I'm shopping for games, get my activation key, copy and paste into Steam and from there on nothing it's all fluffy clouds, pretty rainbows and many happy hours of pleasurable immersion.

For those that don't like Amazon, there's Green Man Gaming, GameFly and more besides.