Tech leader Amazon’s recent corporate filings in Luxembourg have given rise to speculations about the firm’s tax planning. The company reportedly garnered record sales income of €44 billion (~USD52 billion) in Europe last year, while not needing to pay any corporation tax to the local government.
The retail giant sells its products to millions of customers in the United Kingdom and across Europe through Amazon EU Sarl. Evidently, accounts for Amazon EU Sarl revealed that even with record sales income, Amazon’s Luxembourg unit saw a €1.2 billion (~USD1.4 billion) loss, and thus, the firm did not pay tax.
Amazon’s Luxembourg unit is supposedly the source for sales in France, the UK, Germany, the Netherlands, Italy, Spain, Poland, and Sweden.
The unit apparently gained €56 million (~USD67 million) in tax credits to offset any prospective tax bills in the event of it turning a profit. The company’s estimated €2.7 billion (~USD3.2 billion) worth of carried forward losses can reportedly help it set off any tax on future profits.
Labor MP of the UK, Margaret Hodge, a long-time campaigner against tax evasion, reportedly said that the tech giant’s revenues have soared during the pandemic, yet it continues to direct its profits towards tax harbors like Luxembourg to avoid paying taxes.
She added that US President Joe Biden has proposed a new and fairer tax system, however, the UK has not expressed support for these reforms. Evidently, under the new system, large conglomerates and digital companies would pay taxes to national governments based on their sales in each country.
Amazon EU Sarl accounts filed in Luxembourg showed that the 2020 sales income has increased by €12 billion (~USD14 billion) from the 2019 figures of €32 billion (~USD38 billion), as per reports.
However, the company’s US accounts apparently indicate that the UK sales income has seen a notable 51% hike to reach a record USD26.5 billion with the rise in pandemic-induced purchases.
A spokesperson for the company reportedly underlined that the company pays all taxes required in each country where it operates.