Amazon is a major UK employer and currently employs over 27,500 UK people. The company said that this number would increase to over 29,500 this year.
US online retail giant Amazon paid GBP220m in UK direct taxes in 2018 out of total UK revenues of GBP10.89bn.
In a blog posted on September 3, 2019, the company said that employer taxes accounted for the largest proportion of these direct taxes, followed by business rates, corporation tax, then other taxes such as stamp duty land tax.
The company said that its total tax contribution (combining direct and indirect) was GBP793m and that it invested over GBP625m in infrastructure.
Amazon has been criticized in the past for not paying its fair share of UK corporation tax. Earlier in July, Jeremy Corbyn, Leader of the Labour Party, tweeted saying: “You owe the British people millions in taxes that pay for the public services that we all rely on. Please pay your fair share.”
My card to @Amazon on its 25th birthday.
"You owe the British people millions in taxes that pay for the public services that we all rely on. Please pay your fair share."#Amazon #Amazon25 pic.twitter.com/8YewzxEb1K
— Jeremy Corbyn (@jeremycorbyn) July 5, 2019
Kevin Hollinrake, Member of Parliament, tweeted: “Immoral, indefensible, unacceptable. Amazon continues to exploit UK by shifting profits to Luxembourg.”
Immoral, indefensible, unacceptable. @amazon continues to exploit UK by shifting profits to Luxembourg. Would make this a key stream of work if elected as Chair of the @CommonsTreasuryhttps://t.co/j0hrsHo1yc
— Kevin Hollinrake (@kevinhollinrake) September 4, 2019
The company in its blog stated that “focusing narrowly on one aspect of taxation, such as Corporation Tax…which…accounts for only around 6% of total taxes collected from UK businesses and individual taxpayers…doesn’t tell the whole story.”
The blog adds: “This is particularly relevant for growing businesses like Amazon which have a high volume of sales, but where operating profits remain relatively low due to price pressure in competitive markets, intense capital investment programmes, and increasing operating costs (including those from a growing workforce).”
The company said: “Most governments —including the UK Government—actively encourage companies to make these investments, and they often use the taxation system to do so. Capital allowances and R&D credits are designed to stimulate the kind of investment necessary to grow the economy and create jobs. On the one hand, these reduce corporation tax, but this is more than made up for by the increased tax revenue or lower costs for the Government in other areas.”
Amazon is a major UK employer and currently employs over 27,500 UK people. The company said that this number would increase to over 29,500 this year.
The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also regularly writes news stories about transfer pricing and international tax law. Alex is reachable at editor@transferpricingnews.com