Are Amazon under investigation by HMRC for avoiding taxes in Britain?

Internet giant Amazon.co.uk may be facing an investigation by HM Revenue & Customs after allegedly avoiding corporation tax in 2010 and 2011 . . .

UK Tax authorities are alleged to launch a tax enquiry into retail giant Amazon’s tax affairs amidst fears that the multi-national company has avoided paying full corporation tax on any of their profits.

Amazon’s latest accounts allegedly reveal that no corporation tax was paid at all in 2010 or 2011 to the British Government.

In 2011, according to an investigation by the Bookseller magazine, Amazon generated sales of more than £3bn, but paid no UK corporation tax on that turnover.

The company decided to transfer its ownership to a Luxembourg company in 2006. A year after the move Amazon admitted that one of the key reasons for this decision was because it would ‘benefit their effective tax rate.’

Amazon’s 2010 accounts, filed by Amazon EU Sarl, show that the company’s Luxembourg office employed a mere 134 individuals, but generated a massive turnover of £6.5bn. Shockingly, in the same year the UK operation employed 2,265 employees and reported a turnover of £147m; which in comparison seems low.

An Amazon spokesperson said:

“Amazon EU serves tens of millions of customers and sellers throughout Europe from multiple consumer websites in a number of languages, dispatching products to all 27 countries in the EU. We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation.”

When asked why it switched ownership of the UK business to Luxembourg, Amazon declined to comment. The US parent company Amazon has suggested that it may have been done to reduce the group’s tax bill.

The company made a statement in 2006 admitting that they were: “establishing our European headquarters in Luxembourg, which we expect will benefit our effective tax rate over time.”

HM Revenue & Customs are yet to officially confirm anything:

“We can’t discuss Amazon for legal reasons, but HMRC applies the tax laws as they apply to multinationals so the UK receives the tax revenues to which it is legally entitled.

“Where there is a high risk of the UK losing out we move our resources to challenge the risk and HMRC works within the Joint International Shelter Information Centre on a co-ordinated global approach to prevent loss of tax through unacceptable corporation structuring,” HMRC added.

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