Amazon UK unit pays $8m in corporation tax as sales hit $17.5bn

FILE PHOTO: The logo is seen inside the Amazon Japan office building in Tokyo, Japan August 8, 2016. REUTERS/Kim Kyung-Hoon/File Photo

LONDON (Reuters) – Inc’s main UK subsidiary, Amazon UK Services Ltd., paid just 6.3 million pounds ($8 million) in corporation tax in 2019 as the group reported more than $17.5 billion in sales in Britain, according to accounts released Wednesday. .

Amazon said the low figure reflected the underlying state of its UK business.

“Corporate tax is based on profits, not revenues, and our profits have remained low given that retail is a highly competitive, low-margin business and we continue to invest heavily,” said the company in a press release.

Amazon does not report earnings in the UK. UK sales are made largely through a network of Luxembourg-based companies, primarily Amazon EU Sarl, which is also subject to UK tax on part of its profits. However, this company reported last year a tax credit of 294 million euros.

Amazon has faced criticism for its UK tax practices for years and is currently in a legal battle with the European Commission over allegations, which Amazon denies, that it received unfair tax advantages from Luxembourg. .

Last week the company published a report on its tax contribution to Britain which said the group paid £293 million in tax in 2019.

However, this figure was almost entirely made up of National Insurance, a form of social security tax on employee wages, business taxes, a form of local property tax, taxes on imported goods and stamp duty on land purchases.

Other retailers say Amazon’s tax-efficient structure gives the Seattle-based group an unfair advantage over its UK rivals which are faced with bigger businesses, payrolls and local tax bills.

The 2019 accounts for Amazon UK Services Ltd, which employs more than 25,000 people, show the company also saved £17million in tax from the UK’s treatment of employee share awards, which is more generous than the treatment offered by some other countries.

Reporting by Tom Bergin; edited by Carmel Crimmins

Luisa D. Fuller