Although there was a lockdown surge and Amazon reported a sales income of £38bn in Europe, the firm’s Luxemburg unit took a loss of €1.2 billion, which resulted in paying zero corporate taxes. Specifically, the unit was granted €56m in tax credits, which can balance any future tax bills if it turned a profit.
Despite the fact that Amazon’s market share in the UK stands at 30%, Luxemburg’s unit is responsible for sales in some of the biggest countries in Europe, like France, Germany, Italy, Netherlands, Poland, and the UK.
Luxemburg is a low-tax country, which is why Amazon reached a confidential agreement with the country’s tax authorities in just a few months and has had its headquarters there since 2003.
The newly elected US president Joe Biden has proposed plans to the Organisation for Economic Cooperation and Development to impose changes in the global tax system, which includes a minimum corporation tax rate. Although Germany and France approved the new plans, the UK still remains silent.
However, Amazon is not the only corporate giant to avoid taxes. Over the past decade, Facebook, Google, Netflix, Apple and Microsoft are accused of avoiding a global tariff of $100 billion in taxes.