Amazon is accused of ‘appalling tax avoidance’ after it emerges the company’s European arm scored record sales of £38billion last year… but didn’t pay a penny in corporation levy
- Amazon’s European business didn’t pay corporation tax last year
- It was despite sales rocketing from £27.9billion in 2019 to £38billion in 2020
- Accounts filed in Luxembourg showed losses soared from £580m to £1billion
- Because of this, Amazon received tax credit which it can deduct from future bills
- An Amazon spokesman yesterday insisted it ‘pays all the taxes required’
Amazon’s European business paid no corporation tax last year despite record sales of £38billion.
Sales rocketed from £27.9billion in 2019 as the pandemic fuelled demand for internet shopping.
The global giant racked up revenues of more than £4million an hour in 2020. However, it paid no corporation tax after recording its biggest annual loss so far.
Accounts filed in Luxembourg, where the company’s European division is based, showed losses soared from £508million to £1billion. Because of this, Amazon actually received a tax credit – money it can deduct from future bills – worth £49million.
The company has denied claims that it struck a ‘sweetheart deal’ with Luxembourg tax chiefs. Paul Monaghan, of the Fair Tax Foundation, said: ‘These figures are mind-blowing, even for Amazon.
Amazon’s European business paid no corporation tax last year despite record sales of £38billion, skyrocketing from £27.9billion in 2019 as the pandemic fuelled demand for internet shopping (stock image)
‘We are seeing accelerated market domination across the globe on the back of income that continues to be largely untaxed – allowing it to unfairly undercut local businesses that take a more responsible approach.’
Labour MP Dame Margaret Hodge accused Amazon of a ‘relentless campaign of appalling tax avoidance’. She told The Guardian: ‘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.’
The Fair Tax Foundation said Amazon had now built up more than £1.9billion in ‘carry-forward’ losses, which it can use to reduce future tax bills.
Mr Monaghan said: ‘The bulk of Amazon’s UK income is booked offshore in the enormous loss-making Luxembourg subsidiary, which means that not only are they not making a meaningful tax contribution now, but are unlikely to do so for years to come given the enormous carried forward losses they have now built up there.’
Labour MP Dame Margaret Hodge (pictured) accused Amazon of a ‘relentless campaign of appalling tax avoidance’
The firm’s sales rocketed in the UK in 2020 – up from £12.6billion to £19.1billion, according to filings in the US. Mr Monaghan said Amazon had paid an effective corporation tax rate of just 9.8 per cent on global profits over the past decade. The UK rate is 19 per cent. US President Joe Biden recently proposed a tax crackdown on technology giants and other multinational firms amid concern they are not paying enough.
He has called for a new system that would force companies to pay more in the countries they operate in alongside a global minimum corporation tax rate.
An Amazon spokesman yesterday insisted it ‘pays all the taxes required’. He added: ‘Corporate tax is based on profits, not revenues, and our profits have remained low.’ He stressed the firm had invested over £56billion in Europe since 2010, helping to create ‘many thousands of new jobs’, significant local tax revenue and support for small European firms.