Amazon paid no corporation tax on its European operations last year despite breaking sales records as it continues what MPs are calling its “relentless campaign of appalling tax avoidance”.
According to corporate filings in Luxembourg, where Amazon’s EU headquarters is situated, the retailer raked in a whopping €44 billion (£38 billion) across its European markets last year.
Despite this Amazon’s Luxembourg unit, which handles the sales for the UK, Germany, France, Italy, Spain, Sweden and the Netherlands, made a loss of €1.2 billion (£1.04 billion) meaning it paid zero corporation tax in the country, The Guardian reported.
While Amazon is still required to pay some corporation tax in the UK, a huge portion of its income from the country is booked offshore in its Luxembourg subsidiary, where it posts major losses.
This is because Amazon’s UK website is operated by Amazon EU Sarl, the Luxembourg-based entity.
The €1.2 billion loss posted this year actually means that Amazon has been granted €56 million in tax credits to offset any future tax bills when it turns a profit in the country, meaning it now has €2.7 billion worth of carried forward losses stored up.
“Amazon’s revenues have soared under the pandemic while our high streets struggle, yet it continues to shift its profits to tax havens like Luxembourg to avoid paying its fair share of tax,” Labour MP Margaret Hodge said
“These big digital companies all rely on our public services, our infrastructure, and our educated and healthy workforce. But unlike smaller businesses and hard-working taxpayers, the tech giants fail to pay fairly into the common pot for the common good.
“President Biden has proposed a new, fairer system for taxing large corporations and digital companies but the UK has not come out in support of the reforms. The silence is deafening.”
While Amazon’s Luxembourg accounts to not break down sales figures from each country, separate accounts from the US show that income in the UK rose 51 per cent to a record £19.4 billion last year.
An Amazon spokesperson said: “Amazon pays all the taxes required in every country where we operate. Corporate tax is based on profits, not revenues, and our profits have remained low given our heavy investments and the fact that retail is a highly competitive, low margin business.
“We’ve invested well over €78bn in Europe since 2010, and much of that investment is in infrastructure that creates many thousands of new jobs, generates significant local tax revenue, and supports small European firms.”