Posted by Christie Malry on December 8, 2012 at 9:53 pm
the creation of the structures was when the avoidance took place
If the trade does not occur in Luxembourg then the claim it does is the act of avoidance
transfer pricing is not the issue
Residence and whether there is a permanent establishment is the issue
Add the two together and what Ritchie is saying is this: Amazon has structured its business in Europe specifically so as to avoid creating a permanent establishment in the UK. It has satisfied HMRC that there is no permanent establishment in the UK. But, because Ritchie thinks Amazon should have a permanent establishment in the UK, he deems the structure they actually put in place to be "avoidance".
Please note that the term 'permanent establishment' has a defined legal meaning, which HMRC takes great care in interpreting. This is not something that HMRC lets companies off on a whim. So Ritchie is actually saying that HMRC and Amazon and their respective legal advisors are all wrong and that he is right.
Please also note that he provides no analysis to support his claim. It's just because he says so.
Updated because I erroneously started writing about Starbucks when I meant Amazon. Thanks Frances.