Amazon slammed for ‘insult’ tax bill in the UK despite record profits
05 Aug 2018
- Amazon disclosed in a filing that its corporate tax bill in Britain was around £4.6 million last year, almost half the £7.4 million it paid in 2016.
- The company says it has paid all taxes required in the U.K. and every country that it operates in.
- An anti-tax avoidance advocacy group based in the U.K. criticized the lower tax payment, calling it an “insult.”
Amazon has been criticized for paying less corporation tax in the U.K. in 2017 than it did the previous year.
The tech giant disclosed in a filing Thursday that its corporate tax bill in Britain was around £4.6 million ($6 million) last year, almost half the £7.4 million ($9.6 million) it paid in 2016. The amount actually paid was just $1.7 million, due to tax deferrals. Amazon says it has paid all taxes required in the U.K. and every country that it operates in.
The filing was made by Amazon U.K. Services Ltd, a division of the company devoted to warehouses and logistics operations. It also showed that the e-commerce firm’s pre-tax profits in the U.K. leaped from about £24.3 million to almost £72.4 million.
Amazon as a whole posted its highest ever quarterly profit last week, reporting a net income of $2.5 billion. It marked the third consecutive quarter in which the company surpassed $1 billion in profits.
In Britain, corporations are required to pay 19 percent of their profits in tax. The government wants to lower this to a rate of 17 percent by 2020.
The Tax Justice Network, an anti-tax avoidance advocacy group based in the U.K., criticized the lower tax payment, calling it an “insult.”
“It clearly shows that our global tax system is fundamentally broken and needs urgently fundamental reform,” the organization told CNBC via email. “Otherwise, small and medium enterprises will be ruined at the expense of global players who are most aggressive in pushing down their tax rates and controlling ever more market share.”
The activist group said large multinational firms should be forced to report their financial activities on a country-by-country basis.
A spokesperson for Amazon said in statement: “Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly-competitive, low margin business and our continued heavy investment.”
The news could embolden critics of Amazon who claim the firm and other tech giants are not paying enough tax. President Donald Trump for instance has attacked Amazon frequently, claiming the company pays “little or no taxes to state and local governments.”