Amazon paid no corporation tax on its European operations in Luxembourg in 2020 despite reporting record sales income of €43.8bn (£38bn), accounts show.
Figures filed in Luxembourg for Amazon EU Sarl, the European headquarters through which it sells products to the UK and much of the continent, reveal the company paid no tax because it reported a loss of €1.2bn (£1bn). This was despite sales rising from €32.2bn (£28bn) in 2019.
The filings, first reported by the Guardian, showed the online giant was granted a further €56m (£48.7m) in tax credits due to the loss. It has also accumulated €2.7bn (£2.4bn) in losses carried forward which can be used to offset future tax bills.
Labour MP Margaret Hodge told the newspaper the UK government should follow the example of new US president Joe Biden who has called for changes to the global tax system including a minimum corporation tax rate.
She said: “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.”
Last week, Amazon reported its net profits had more than tripled in the first quarter of 2021, hitting $8.1bn while global sales soared 44%.
An Amazon spokesperson said: “Amazon pays all the taxes required in every country where we operate. Corporate tax is based on profits, not revenues, and our profits have remained low given our heavy investments and the fact that retail is a highly competitive, low-margin business. We’ve invested well over €78bn in Europe since 2010, and much of that investment is in infrastructure that creates many thousands of new jobs, generates significant local tax revenue, and supports small European firms with programs like Fulfillment by Amazon – we now have 60 fulfillment centers, over 100 corporate offices and development centers, and over 135,000 full-time employees across Europe. And there are over 100,000 EU-based sellers using our services to reach new customers and grow their businesses. We operate this pan-European business from our headquarters in Luxembourg where we have over 3,000 employees and growing, including our senior leadership team."