Can you get the gist? Read the text and answer a few questions to see if you understood the article by doing a quick quiz! The vocabulary list at the end will help you with the key words in the text. (B1/B2 and above)
Amazon pays $16 million tax in Germany, while making $11.9 billion sales
By Tom Bergin on Yahoo Finance
Internet retailer Amazon.com Inc.’s main German operating unit paid just 11.9 million euros ($16 million) in tax in 2014, despite the group recording $11.9 billion in sales to German customers last year, regulatory filings show.
Germany is Amazon’s biggest market outside North America, its annual report shows, but until recently all sales and almost all profits were reported via lightly taxed Luxembourg companies.
Amazon’s main German operating unit, Amazon.de GmbH, manages the German website and oversees deliveries but is funded by payments from the Luxembourg companies.
Accounts filed in late April and only publicly available in recent weeks, show Amazon.de made a profit of just 32 million euros in 2014 and paid corporate income tax of 11.9 million euros. Using the average exchange rate for 2014, that equates to around $16 million in tax.
“Corporate tax is based on profits, not revenues. E-commerce is a low-margin business and highly competitive, and Amazon continues to invest heavily around the world, which means our profits are low,” an Amazon.de spokesman said.
The company said last week it had introduced changes in the United Kingdom, Germany, Spain and Italy from May 1, so that future sales would be booked in these countries.
Tax experts said the new arrangement could require Amazon to pay more tax in future years.
Decide whether the following statements are true or false based on the article.
VOCABULARY
retailer = a business that sells goods to the public
lightly taxed = not having to pay a lot of money in taxes
fund, funded, funded = finance, -d, -d / Related quiz: Find, fund, or found? Confusing words untangled
make a profit of 10 million = to make 10 million in profits (Profit = the money you make by selling things after paying the costs involved)
equate to = be equal to
revenues = the money a company receives from its business (revenues minus costs equals profits)
low-margin business = in a low-margin business the profit is small because the expenses are not much less than the gross income (income before taxes). Restaurants and grocery stores work on a small margin, but make up for it with a large sales volume
invest heavily = invest a lot of money in something
Featured image from http://finance.yahoo.com.
If you like our lesson, share it with friends and colleagues. Thanks!
