Amazon UK pays just $8 million corporation tax as sales hit $17.5 billion

Platform Industry News: Amazon’s main UK subsidiary, Amazon UK Services Ltd, paid only 6.3 million pounds (approximately $8 million) in corporation tax in 2019 despite the group reporting over $17.5 billion in earnings in the UK.

Amazon said the low figure reflected the underlying state of its UK company.

“Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly-competitive, low margin business and we continue to invest heavily,” the company said in a statement.

Amazon does not print its UK profits. British sales are reported mostly through a web of Luxembourg-based companies, principally Amazon EU Sarl, which is also subject to UK tax on some of its earnings. But, that company reported a tax charge of 294 million euros this past year.

Amazon has faced criticism for its tax clinics in the UK for decades and is now fighting a legal battle with the European Commission over claims, which Amazon denies, that it obtained unfair tax advantages from Luxembourg.

Last week, the company published a report on its tax contribution to Britain that stated the group incurred taxes of 293 million lbs in 2019.

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However, that figure was almost completely made up of federal insurance, a kind of social security tax on workers’ wages, business rates, a type of local property tax, taxes on imported goods and stamp duties on land purchases.

Other retailers say Amazon’s tax effective structure gives the Seattle-based group an unfair edge over UK competitors who face larger corporation, payroll and local tax bills.

The 2019 accounts for Amazon UK Services Ltd, which employs over 25,000 people, show the company also saved 17 million pounds in tax because of the UK’s treatment of share awards to staff, which can be significantly more generous than the treatment offered by some other countries.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Tom Bergin. Editing by Carmel Crimmins.

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