Amazon's corporation tax bill is less than it receives in grants

16 May 2013

amazon-logo Despite making £4.2bn in sales, Amazon are getting grants. And it just so happens that those grants amount to more than the amount of UK corporation tax they're paying, which is bound to anger people as yet another huge company manages to sidestep their tax obligations.

Their corporation tax bill was £2.44m while the company received £2.5m from the Scottish Government to build a new distribution warehouse in glamorous Dunfermline.

"Amazon’s behaviour is not only unfair, it is anti-competitive, putting British businesses that do pay their proper tax at a disadvantage," said Margaret Hodge, chairman of the Public Accounts Committee (PAC).

"Paying £2.4m in tax on £4.2bn of sales is just a joke. What people will find particularly galling is that the amount Amazon is paying in tax is actually less than they are taking from UK taxpayers’ pockets in the form of government grants."

Amazon manage this tax-diddle because all sales to British customers are put through a Luxembourg affiliate, Amazon EU Sarl. It is funded by fees it receives from Amazon EU and, as these just cover operating costs, there isn't much for HMRC to tax. So, they're not breaking the law.

Apple, Starbucks, Google and Microsoft are also doing similar schemes, which is flummoxing MPs who like moaning about it, but not solving it.  Amazon are unrepentant, saying: "Amazon pays all applicable taxes in every jurisdiction that it operates within."

TOPICS:   Banking   Investments   Tax

10 comments

  • Grammar N.
    The comments from people like Margaret Hodge do more to show the inadequacies of the government than the indecencies of companies like Amazon. The problem is that the government appoint the big accountancy firms and tax lawyers to draft the tax rules and legislation but those same firms then advertise to businesses that they drafted the rules so they know the loopholes. Massive conflict of interest if you ask me.
  • Marky M.
    Do they mean THIS Margaret Hodge? http://bit.ly/14sodQs
  • klingelton
    love Apple. love Amazon. love Starbucks. Do i give a hoot if they don't pay a chunk of their profits in Corporation tax because they don't need to? no. would i pay tax if i didn't need to? No. No difference.
  • bah h.
    Apple are s**t, Amazon are s**t, Starbucks are s**t. If they stuck their head in an oven would I do it? No. Positive slant on the story is that the 2.5 million grant will go right back into the economy in some form and over an extended period of time. Construction of the distribution warehouse, employment of those involved with that at the time and ongoing employment of the staff at the actual warehouse itself. This quite clearly isn't a distribution centre that's going to take its government handout and shut the following year, is it? and I'd also suspect they won't be getting another 2.5 million this year to build a bloody canteen and ensuites thus the process of making money from this commences. Spend to save. Also bellend is every story of yours either going to be anti-scottish now or can we expect more 2 month old stories taken from other bloggers?
  • Gran'ma N.
    Cunts, absolute cunts! (Amazon btw, ..well, & some of you, obviously).
  • LL J.
    The real cunts are the retarded Great British Public who are stupid enough to equate in their pea-brains corporation tax with a tax on the rich, just because hey corporations have a lot of money don't they? A poor person's pension invested in shares of a successful company gets taxed but a billionaire's failing enterprise does not. It's nothing but a tax on success, and a reward for failure. It drives business away from these isles. It's wrong and I applaud any attempt to dodge it.
  • Kevin
    Big difference between Amazon UK and Amazon US and indeed Amazon EU who is actually the company we buy most of our products from NOT Amazon UK, look at your invoices and see who you are paying. Those sales figures in the billions are not for the same company that is paying corporation tax in the UK. Their sales are £147 million. The corporation tax paid might be lower than some would like but they do actually pay every single penny that they have to, as do all businesses why would anyone pay more than they are legally required to do? If MP's don't like it then they need to pass new laws not bitch at successful companies employing over 4000 people in the UK, and funnily enough paying their salaries, NI etc.
  • PlatinumPlatypus
    Kevin, NI etc is taken from employees' salaries, it is not an additional benefit paid for by the employer. They merely facilitate its payment from the employee.
  • Phil
    Surely as politicians they should look at the countries that offer the tax havens rather than the companies? Amazon etc are obviously going to try and reduce their tax bill as best they can, within the rule of law. @PlatinumPlatypus Employers do pay national insurance btw.
  • LL J.
    @Kevin MPs do like it though. Behind closed doors they recognise that corporation tax is a bad form of tax, and is detrimental to the economy. But it would be electoral suicide to scrap it because the general public are not economists. They don't close the loopholes because they don't want to, preferring to deflect public anger towards the companies who use the loopholes rather than the politicians who created them. And they have been very successful at doing so.

What do you think?

Connect with Facebook, Twitter, or just enter your email to sign in and comment.

Your comment