Amazon 'still not paying fair share' of tax

Updated
maryland  usa   june 3  2014 ...
maryland usa june 3 2014 ...



Amazon's latest accounts show it is still engaging in tax avoidance - while relying on the British taxpayer to top up its low wages.

Last year, the company made a record £5.3 billion in sales, but used complicated accounting techniques to post pre-tax UK profit of just £34 million. As a result, it paid only £11.9 million in corporation tax.

Despite the fact that British shoppers spent £5.3 billion with the company in 2014 - 9.4% of its worldwide sales - Amazon.co.uk limited claims not to sell to British online shoppers. Instead, sales are routed through its company in Luxembourg, where taxes are lower.

According to the accounts, indeed, Amazon.co.uk limited turned over just £679 million, all from providing 'fulfilment and corporate support services' to the Luxembourg arm, Amazon EU Sarl.

After George Osborne announced a punitive 25% tax for companies artificially routing profits out of the country earlier this year, Amazon stopped doing so and will file a UK tax return next year. However, it's still not likely to pay much more in tax, as the Luxembourg company is steadily feeding profits to the US.

Campaign group The Taxpayers Alliance argues that more needs to be done. "You can understand people's anger at organisations like Amazon perceived not to be paying their fair share, but our frustration should be focused at the politicians and bureaucrats who have created our ludicrously complicated tax code," says chief executive Jonathan Isaby.

"It is so riddled with loopholes and exemptions that those who can afford to find them will be able to. It's time for a radical simplification of the tax code to make it easier to administer, to make the line between 'avoidance' and 'evasion' more obvious, and with fairer and lower taxes across the board."

Meanwhile, adding insult to injury, the taxpayer is propping up Amazon's profits by subsidising the company's pay. Many of the company's 7,700 staff earn as little as £7.39 an hour - a wage inadequate enough to qualify many for tax credits.

A recent study by Citizens UK revealed that there are 5.2 million low-paid workers in the UK, receiving £11 billion in state support. If they were paid the Living Wage instead of the minimum wage, the authors calculate, it would save the taxpayer £6.7 billion in benefits.

Earlier this week, London mayor Boris Johnson warned David Cameron and George Osborne that tax credits shouldn't be cut unless employers started paying their way. "Before we start hacking back on people's in-work benefits we've got to look at the low pay from corporations that could be coughing up much, much more to help them," he said.

EU: 'Amazon's Low Tax Deal in Luxembourg May Be Illegal'
EU: 'Amazon's Low Tax Deal in Luxembourg May Be Illegal'



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Tax credits: an excuse for low pay

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