Despite billions in sales, Amazon Europe received €241m in tax credits last year

Despite billions in sales, Amazon Europe received €241m in tax credits last year
Finance

Amazon Europe was granted €241m in tax credits last year, despite reporting nearly €30bn in sales, and even as authorities move to collect more taxes from tech giants. The credits could be deducted from taxes owed on future earnings, according to The Guardian.

In recent years, tech companies in Europe, many of which are based in the US, have been widely criticized for not paying their fair share of taxes in nations where they earn billions. 

Based in Luxembourg, Amazon Europe aggregates the company’s sales from every nation in Europe. They reported pretax losses totaling €493m, despite sales rising 11.6 percent to €28bn.

The company attributed the loss to €7bn in investments, which went toward new offices, fulfillment centers, and services for customers. They also paid €114.3bn in royalties and licensing agreements, in some cases to affiliated companies, which campaigners say can reduce tax bills in some nations. 

In 2017, Amazon paid just €55m in taxes on revenues of €24.9bn. The company has already been ordered by the European Commission to repay €250m in “illegal tax advantages.”

A company spokesman defended the company’s relatively small tax bill, saying:

“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.”

According to Amazon, they’ve invested €55bn in Europe since 2010, now employing over 95,000 full-time staff.

In the UK, the company has reduced its tax burden through share-based bonus payments to staff, which in 2018, were up a third from the year before. 

Amazon UK Services, the company’s warehouse and logistics division, owed £14m in corporation taxes for 2018, almost £10m more than the year before. But according to accounts published Monday, the company expects to pay just £1.06m, once £13m of that tax bill is offset by credits stemming from the share-based payments.

In 2017, those credits totaled just £3m, and the company paid £1.7m to UK authorities, suggesting that even as authorities aim to hold Amazon accountable, they’re actually paying even less. 

In July, France passed a taxaimed at tech firms with annual revenues of more than €750m, if more than €25m is earned in France. 

UK Prime Minister Boris Johnson said, at an event earlier this summer:

“I think it’s deeply unfair that high street businesses are paying tax through the nose… whereas the internet giants, the FAANGs—Facebook, Amazon, Netflix and Google—are paying virtually nothing. We’ve got to find a way of taxing the internet giants on their income, because at the moment it is simply unfair.”

Photo by David M Jones / Amazon warehouse

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