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Amazon pays €16.5m tax on €21.6bn revenue in the EU

By Chris Dawson August 20, 2017 - 2:45 pm

Amazon‘s tax affairs are in the news again. With the news recently out that they paid £7.4 million UK tax in 2016 on a turnover of £1.46 billion, it’s now also been revealed by The Guardian that in the Luxembourg they paid €16.5m tax on European revenues of €21.6bn.

With sales of €21.6bn across the EU, the €16.5m tax might appear to be a paltry amount, but tax is paid on profits not on turnover. It’s also worth remembering that this isn’t Amazon’s services business, the EU tax mainly relates to Amazon’s own retail operations and they operate on razor thin margins with their goal to be the best price available online.

“Amazon pays all the taxes that are required in every country where we operate. We operate a pan-European business from our headquarters in Luxembourg where we have over 1,500 employees and growing, including our senior leadership team. We’ve invested over €20bn in Europe since 2010, and expect to hire 15,000 new employees this year, bringing our total permanent European workforce to over 65,000 people.”
– Amazon spokesperson

There’s little doubt that Amazon, like any company, look to minimise the amount of tax that they pay. However it’s also only fair to point out that no company invests and is expanding as quickly as Amazon. Ever since they first opened they’ve had a voracious appetite for growth and that’s where their focus has always been. Profits and returning money to investors simply aren’t at the top of Amazon’s list of priorities.

Many, especially MPs are questioning if this is fair and if Amazon are making a tax contribution commensurate with the size of their business. However MPs are also delighted when Amazon invests in their constituency by opening a new depot creating thousands of jobs. Low profits and high investment is why Amazon’s taxes are so low.

  • Adam
    2 years ago

    Delighted that Amazon pay so little tax – anything that will help propel Jeffrey Preston Bezos towards the number one spot he so desires.

  • Derek Duval
    2 years ago

    I’m surprised the EU or any Anti competition laws have not thrown at Amazon.

    Surely they are getting to big and lack of competition is no good. for anybody

    At this rate there will only be 2 companies operating in 50 years time. Google or Amazon

  • SAM
    2 years ago

    It is all designed to put everyone out of business at the end of the day. They sell many things at cost then dump the stock to kill of everyone else, is is a wonder they have small profits.

    The thousands of jobs they create, and there are many just up the road from us in Dunfermline as we drive by the huge sweathouse (thank you Gordon) are of low quality and poor pay. You can get a job as a Amazon FLEX (lol) Driver or a warehouse slave here on a temp contract around here that is about it. Point is they are costing a lot of other jobs better paid more stable etc.

    They have an unfair advantage and their is a point to big is too big. Problem till if effect’s you people dont do anything these days.

    I used to really admire them, but I think they are like locust now destroying everything else in their path.

  • David Fear
    2 years ago

    TAX IS PAID ON PROFITS, NOT REVENUE!!!!!

    Quote from: https://www.theguardian.com/technology/2017/aug/10/amazon-uk-halves-its-corporation-tax-to-74m-as-sales-soar-to-7bn
    “Amazon Europe, which is based in Luxembourg and aggregates the billions of pounds of sales the retailer makes from individual countries across the continent, reported a pre-tax profit of €59.6m last year. As a result the company, which clocked up €21.6bn in sales across Europe last year, had a tax bill of just €16.5m.”

    €16.5m TAX on a pre-tax PROFIT of €59.6m is correct maths. However did Amazon really only have a profit of 0.27% ???

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