Last year, the European branch of Amazon realised a turnover of 44 billion euros. However, the e-commerce giant is not paying any corporation tax on those revenues.
Loss
Partly thanks to the coronavirus crisis, Amazon EU saw its turnover rise by 12 billion euros last year, writes The Guardian. Despite this, the Luxembourg-based company officially posted a loss of 1.2 billion euros, which means it does not have to pay corporation tax. In fact, Amazon was granted 56 million euros in tax credits, which it can deduct from any future profits.
“Amazon’s revenues have soared under the pandemic while our high streets struggle,” said British MP Margaret Hodge. “Yet the company continues to shift its profits to tax havens like Luxembourg to avoid paying its fair share of tax. These big digital companies all rely on our public services, our infrastructure, and our educated and healthy workforce,” Hodge added.
“Low margins”
Amazon says it pays the tax it is due in each country. According to a company spokesman, profits have remained low due to heavy investments and low margins in online retail. “We’ve invested well over 78 billion euros 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.”
Amazon is certainly not the only multinational to set up complicated corporate structures to avoid taxes. According to the campaign group Fair Tax Foundation, the six largest American tech companies (Amazon, Facebook, Google, Netflix, Apple and Microsoft) have ‘saved’ at least 100 billion dollars in the past ten years by operating this way. Of these companies, Amazon is said to pay comparatively the least amount of tax.
