May 16, 2021

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Amazon European has not paid corporate taxes for 2020


The documents showed that Amazon’s European arm did not pay any corporate taxes in Luxembourg for the past year, despite revenues of about 44 billion euros.

Amazon EU Sarl acquired 43.84 billion euros (38.01 billion pounds), an increase of 11.65 billion euros from 2019, according to the deposits first reported by Watchman reveal.

However, because it incurred a loss of € 1.19 billion (£ 1.03 billion), the Luxembourg-based subsidiary was not required to pay any tax and in fact received € 56.39 million (£ 48.95 million) in credit.

Adding in losses, including from previous years, gives the company 2.7 billion euros (2.35 billion pounds sterling), which it can offset against any future corporate tax bills.

The company is the corporate entity behind Amazon.co.uk, and sales from this site are calculated in Luxembourg, rather than Britain.

Presidents are awaiting a ruling from the European Union’s second-highest court on tax arrangements in the Grand Duchy, which the European Commission said in 2015 had violated state aid rules.

Next week, the General Court in Luxembourg will issue a ruling on whether Amazon should pay taxes of around 250 million euros (217.08 million pounds) to the country’s government, according to a Reuters report.

Jeff Bezos’ company experienced a general boom during the coronavirus pandemic as customers increasingly relied on online shopping and home delivery.

Amazon announced at the end of last month that its first-quarter profit had more than tripled from last year.

With physical stores closed, it recorded four consecutive record quarterly profits and employed more than 500,000 employees to keep up with demand.

The company faces increasing scrutiny over its complex tax arrangements, amid a push by Joe Biden and tax justice activists for a minimum global corporate tax rate of 21 percent, designed to prevent companies from paying dividends into lower-rate jurisdictions.

Said Alex Cobham, President of the Tax Justice Network The Independent The future shape of Amazon’s corporate structure will be a “test case” to see whether the proposed new rules, if implemented, have worked.

“Amazon pays all required taxes in every country we operate in. Corporate tax is based on profits, not revenue, and our profits have remained low, given our huge investment and the fact that retail is a very competitive, low-margin business,” an Amazon spokesperson said on Tuesday.

We have invested more than 78 billion euros (£ 67 billion) in Europe since 2010, and most of that investment is in infrastructure that creates several thousand new jobs, generates large domestic tax revenues and supports small European businesses.

“We run this European business from our headquarters in Luxembourg, where we have more than 3,000 employees and are growing in number, including our senior leadership team.”