Amazon’s European subsidiary pays no corporation tax for 2020

Amazon’s European arm paid no corporation tax in Luxembourg for last year, despite revenues of some €44bn, documents show.

Amazon EU Sarl took in €43.84bn (£38.01bn), up by €11.65bn from 2019, filings first reported by The Guardian reveal.

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

Adding up losses, including from previous years, gives the firm €2.7bn (£2.35bn), which it can offset against any future corporate tax bills.

The company is the corporate entity behind, and sales from that site are accounted for in Luxembourg, rather than Britain.

Bosses are awaiting a ruling by the EU’s second-highest court on its tax arrangements in the grand duchy, which the European Commission said in 2015 had breached state aid rules.

The Luxembourg-based general court is set to rule next week on whether Amazon will have to pay back taxes of some €250m (£217.08m) to the country’s government, according to a Reuters report.

Jeff Bezos’ firm has experienced an overall boom during the coronavirus pandemic as customers have increasingly relied on web shopping and home deliveries.

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

With physical shops closed, it has posted four consecutive record quarterly profits and recruited more than 500,000 employees to keep pace with demand.

The company is increasingly facing scrutiny over its complex tax arrangements, amid a push by Joe Biden and tax justice campaigners for a global minimum corporation tax rate of 21 per cent, designed to prevent firms pushing profits into low-rate jurisdictions.

Alex Cobham, head of the Tax Justice Network, told The Independent that the future shape of Amazon’s corporate structure would be a “test case” for whether the proposed new rules, if they were implemented, had been successful.

An Amazon spokesperson said on Tuesday: “Amazon pays all the taxes required in every country where we operate. Corporate tax is based on profits, not revenues, and our profits have remained low, given our heavy investments and the fact that retail is a highly competitive, low-margin business.

“We’ve invested well over €78bn (£67bn) 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.

“We operate this pan-European business from our headquarters in Luxembourg, where we have over 3,000 employees and growing, including our senior leadership team.”


Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button