Offices Location & Phone No.
Hongkong, China Office : (852) 2868 9205
Guangzhou, China Office : (8620) 3880 0116
Shanghai, China Office : (8621) 6331 1978
Amazon UK pays ￡2.3 M tax on ￡4 billion sales - Offshore Structure
Amazon’s UK business has recently faced criticism for paying only £2.3 million in corporate tax in 2012, despite generating sales of £4 billion. Corporate tax avoidance has become a major issue across Europe, with several big names including Apple, Google, Starbucks, and Microsoft facing scrutiny over how little tax they pay in markets where they generate billions of dollars in sales. These companies insist that they follow the rules, but the UK Prime Minister, David Cameron, has called for international action on profit shifting to help firms cut their tax bills.
Foreign investors looking to expand globally must carefully consider their investment structure to achieve tax efficiency. It is crucial to ensure that the gains of well-chosen investments are not subjected to unnecessary taxation in the various jurisdictions involved. Tax considerations are crucial for foreign investors making overseas investments, both in terms of structuring the investment transaction locally and ensuring that profits and capital gains can be extracted in a tax-efficient manner.
International Tax (HK) Co. Ltd. provides advice on investment structure for international investment and business through a Hong Kong company to achieve tax efficiency. When considering global expansion, it is worthwhile to consider not only the first investment, but also the overall plans to invest in the region.
A Hong Kong trading company can negotiate and conclude the terms of purchase and sale contracts with European suppliers and customers and carry out relevant operations outside Hong Kong. It may be possible to claim that the trading profits derived are non-taxable in Hong Kong.
To provide certainty in the operation of the territorial source principle, the Inland Revenue Department offers advance rulings on the source of profits for profit tax purposes, subject to the payment of a fee. However, the departmental interpretation and practice notes (No. 31) have no binding force and do not affect a person’s right of objection or appeal to the Commissioner of Inland Revenue, the Board of Review (Inland Revenue), or the courts.
In summary, for foreign investors expanding globally, it is essential to consider the investment structure to achieve tax efficiency. Tax considerations are important in both structuring the investment transaction locally and ensuring that profits and capital gains can be extracted in a tax-efficient manner. The Inland Revenue Department provides advance rulings on the source of profits for profit tax purposes, but these notes have no binding force and do not affect a person’s right of objection or appeal.