Mon Aug 16 2021
If all of the Amazon revenue declared in Luxembourg were real sales then it’d mean each resident would have spent £78,000 with the online retailer
In 2019 Amazon reported £8.2bn of its UK sales in Luxembourg to avoid paying the UK’s higher tax rates according to an analysis report by trade union Unite.
The report goes on to claim that Amazon declared £13.7bn of UK sales to its US accounts for 2019, only reporting £5.5bn in sales for its UK based operations.
In total, Amazon declared around £48.3bn of revenue in Luxembourg for 2019, which equates to around £78,000 worth of goods and services spent for every person in Luxembourg.
Unite’s analysis report, led by chartered accountant Vivek Kotecha dove in-depth into all of Amazons 2019 tax filings and publicly declared information to determine how much tax the company was avoiding paying in the UK.
They examined the accounts of all nineteen of Amazons UK-registered companies, including its warehouse, logistics ops and other firms.
In total, the report estimates that Amazon only paid around £84m on its profits in the UK… around £46m less than they should have according to the report.
The report then goes on to explain how they get away with it.
Amazon is able to move most of the revenue generated in the UK outside of the UK by shifting it to subsidiaries in other countries (like Luxembourg with its low tax rates). Aside from the obvious reasons, Unite are angered by this as this option isn’t available to smaller firms who struggle to compete when they have to pay higher tax rates and amounts.
Anyone buying from Amazon in the UK actually gets billed by their Luxembourg subsidiary, Amazon EU Sarl.
The report details that Amazon EU Sarl had around 4,300 employees in 2019 but recorded revenues of £27.3bn, which works out at around £6.4m per employee… 36 times higher than staff at amazons subsidiaries here in the UK.
Following the release of the report, Unite are demanding the Government run a public investigation into Amazons tax avoidance practices.
I don't want a tax system that takes money from ordinary people to subsidise the growth of the world's biggest anti-union company.
In a statement released in reaction to the report, Amazon rejected both the report and its findings, claiming the discrepancy in tax amounts was because most of its sales to UK buyers were made by the UK branches of its Luxembourg companies and that all figures had been correctly filed with HMRC… A statement which Unite claims just confirms their report.
Our UK retail and Amazon Web Services revenues are recorded here in the UK and reported directly to HMRC. Our total tax contribution in the UK was £1.1 billion during 2019 - £293 million in direct taxes and £854 million in indirect taxes.
Questions are also being raised in Europe however over Amazons tax avoidance practices after it was noticed its corporate tax filing in Luxembourg showed the company paid absolutely no corporation tax there, despite showing sales of £28bn.
According to Amazon this was because Amazon EU Sarl made a £1bn loss in 2019 and so paid no tax… in fact the company were given around £47m in tax credits to offset future tax bills.
Mon Aug 16 2021