Last updated: November 2016
Tax avoidance by bookshop companies
Six companies in our product reports on bookshops received our worst rating for tax avoidance. Two received a middle rating. Luckily there are still a host of companies that score a best mark and provide a more ethical alternative to Amazon.
Below is an infographic which shows how the companies rate for tax avoidance strategies.
The bad news
As you can see from the infographic Waterstones, Alibris, Google, Amazon, Nook and Apple all received our worst rating for likely involvement in tax avoidance strategies.
Waterstones’ parent company is located in Bermuda.
Alibris is owned by a private equity firm which owns high risk companies in the Cayman Islands and Bermuda.
Google is registered in Delaware and has high risk companies in Bermuda. It has admitted that although the vast majority of its profits are made in Bermuda, it has zero employees there.
Nook (Barnes and Noble) is registered in Delaware, and has a high risk subsidiary in Luxembourg.
Apple has high risk companies in Hong Kong, Luxembourg, Nevada (USA) and Singapore. It has for many years paid an ultra-low rate of just 4 per cent on nearly $200bn of profits earned outside the US.
Amazon is based in Delaware and has a number of high risk subsidiaries in Luxembourg. Its tax affairs are currently under investigation in the EU.
Kobo, owned by Rakuten, and WH Smith both received Ethical Consumer’s middle rating. They both have subsidiary companies in tax havens, but they are not the types of companies that Ethical Consumer considers at high risk of being used for tax avoidance strategies.
The good news
The good news is that there are many alternatives to companies which are involved in tax avoidance.
Companies such as Ebooks.com offer viable alternatives to Amazon and Google. The Guardian Bookshop offers a range of books supplied by Bertrams – a company scoring best in our rating.
On the high-street, Blackwells bookshops offer a range of fiction books and textbooks for students. The company also offers to buy-back books and sells second hand books for cash strapped students.
For e-readers these companies do not appear to be engaged in tax avoidance strategies: Bookeen.
While many of the companies listed in this report are unlikely to be involved in tax avoidance schemes, the squeeze on profits from Amazon and Google is affecting how much tax is being paid by everyone in the bookshop sector, as many are failing to make much of a taxable profit.
It could thus be argued that Amazon’s tax avoidance is therefore having a double impact on tax revenue, giving even greater impetus to the Amazon boycott.