MASTERCLASSING

Amazon paid no corporation tax in Europe last year, despite sales income of €44bn

Gabby Fernie

Retail giant Amazon paid no corporation tax in Europe last year, despite generating sales of of €44bn (£38bn) in Europe, a 38 per cent year-on-year increase, according to the Guardian

Despite this record lockdown surge, the firm's Luxembourg unit made a €1.2bn (£1.04bn) loss, meaning it paid absolutely no corporation tax. In fact, the unit was given €56m (£48.46m) in tax credit, meaning that should they turn a profit in the future, this money can be used to further offset any tax bills. 

Labour MP, Margaret Hodge expressed her frustration at the news, telling the Guardian: “It seems that Amazon’s relentless campaign of appalling tax avoidance continues. Amazon’s revenues have soared under the pandemic, while our high streets struggle, yet it continues to shift its profits to tax havens like Luxembourg to avoid paying its fair share of tax. These big digital companies all rely on our public services, our infrastructure, and our educated and healthy workforce. But unlike smaller businesses and hard-working taxpayers, the tech giants fail to pay fairly into the common pot for the common good.

“President Biden has proposed a new, fairer system for taxing large corporations and digital companies but the UK has not come out in support of the reforms. The silence is deafening. The government must act and help to grasp this once-in-a-generation opportunity to banish corporate tax avoidance to a thing of the past.”

The Luxembourg unit – which deals with sales for the UK, France, Germany, Italy, the Netherlands, Poland, Spain and Sweden – employs just 5,262 staff, meaning that the income per employ amounts to €8.4m (£7.27m). 

Sales at the unit actually rose during the pandemic, according to the Amazon EU Sarl accounts, increasing by €12bn (£10.38bn) from 2019. 

However, the accounts, that extend to a mere 23 pages (compared with hundreds of pages for large UK companies), do not break down how much money Amazon made from sales in each European country.