HMRC investigates Amazon for possible tax avoidance
Amazon earned an estimated £7.6bn in sales revenue in the UK but, has not paid tax on any profits from those earnings
Amazon earned an estimated £7.6bn in sales revenue in the UK but, has not paid tax on any profits from those earnings
BRITAIN’S LARGEST online retailer Amazon is being investigated by HM Revenue & Customs (HMRC) for possible tax avoidance.
Following an investigation by Bookseller Magazine, Amazon generated sales of around £7.6bn in the UK, but paid no corporation tax on the profit from that revenue line, The Guardian reports.
HMRC refused to confirm the investigation but Amazon is being investigated in the US, China, Germany, France, Japan and Luxembourg.
The online retailer explains it avoids paying tax because Amazon.co.uk is owned by Luxembourg-based Amazon EU Sarl. The UK operation is a delivery company only, with all payments from the UK to the business transferred to Luxembourg.
The latest 2010 accounts for Amazon EU Sarl show the Luxembourg office employed just 134 people, but generated turnover of €7.5bn (£6.5bn). In the same year, the UK operation employed 2,265 people and reported a turnover of just £147m. According to the SEC filings, UK sales that year were between £2.3bn and £3.2bn. Amazon in the US has earned an average 3.5% profit margin over the past three years.
Amazon switched ownership from the UK to Luxembourg and in an SEC filing in 2006 said; “establishing our European headquarters in Luxembourg, which we expect will benefit our effective tax rate over time”.
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