Bezos tells Johnson it’s up to UK government to force Amazon to pay more tax

CompaniesIndustry

Amazon founder Jeff Bezos has told the prime minister that it is the UK government’s responsibility to force it to pay more tax.

Following a meeting at the United Nations General Assembly, a government spokesperson confirmed that Johnson had “raised the issue of taxation, and hoped progress could be (made) in implementing the G7 agreement on tax.”

In an interview with 5 News, Johnson said that the world’s richest man had been clear that he would not pay more taxes as an “act of kindness”.

“He’s a capitalist and he made the very important point that this is a job for governments. And tax isn’t something that he’s going to pay as an ex-gratia act of kindness. It’s up to governments to come up with the right framework.”

He added: “We’re trying to make sure we change so as to be fair to the taxpayer, fair to other businesses in the high street and elsewhere.”

READ MORE: Boris Johnson to confront Amazon founder Jeff Bezos over company’s tax record

In June, finance ministers from the UK, US and nations within the EU met in Cornwall to discuss a new global tax system which would ensure the world’s largest multinational companies could no longer exploit loopholes to avoid paying tax.

A landmark agreement was reached in which participating countries backed a global minimum tax rate of at least 15 per cent, while agreeing that countries should have the right to tax a certain portion of multinationals’ profits in the locations they are generated.

Despite this, experts have warned that current proposals risk enabling Amazon, a key target of the new legislation, to sidestep tax hikes altogether.

According to a communique sent by G7 ministers over the weekend, these new measures would only apply to “profit exceeding a 10 per cent margin for the largest and most profitable multinational enterprises”.

Amazon runs its retail business at razor-thin margins and reinvests the majority of its profits, a technique which allows it to pay relatively little in corporation tax.

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.

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