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Amazon UK unit pays $8 mln corporation tax as sales hit $17.5 bln

Wed, 16th Sep 2020 10:04

By Tom Bergin

LONDON, Sept 16 (Reuters) - Inc's main UK
subsidiary, Amazon UK Services Ltd., paid just 6.3 million
pounds ($8 million) in corporation tax in 2019 despite the group
reporting over $17.5 billion in sales in Britain, accounts
published on Wednesday show.

Amazon said the low figure reflected the underlying
condition of its UK business.

“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 publish its UK profits. British sales are
reported largely through a web of Luxembourg-based companies,
principally Amazon EU Sarl, which is also subject to UK tax on a
portion of its earnings. However, that company reported a tax
credit of 294 million euros last year.

Amazon has faced criticism for its tax practices in the UK
for years and is currently fighting a legal battle with the
European Commission over claims, which Amazon denies, that it
received unfair tax advantages from Luxembourg.

Last week, the company published a report on its tax
contribution to Britain which said the group incurred taxes of
293 million pounds in 2019.

However, that figure was almost entirely made up of national
insurance, a form of social security tax on employees' wages,
business rates, a form of local property tax, taxes on imported
goods and stamp duties on land purchases.

Other retailers say Amazon's tax efficient structure gives
the Seattle-based group an unfair advantage over British rivals
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 due to the UK’s treatment of share awards to
staff, which is more generous than the treatment offered by some
other countries.
($1 = 0.7748 pounds)
(Reporting by Tom Bergin; editing by Carmel Crimmins)

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