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Amazon to pay corporation tax on UK profits

AMAZON has begun booking its sales in the UK, meaning the resulting profits will be taxed by HM Revenue & Customs.

The online retailer had attracted widespread condemnation for booking its sales through low-tax Luxembourg – a relationship now under European Commission investigation – and led the then-PAC chairwoman to describe its tax structure as “immoral”.

Under the terms of Amazon’s agreement, its tax exposure to the Grand Duchy was capped and the overall cost was limited to less than 1% of the company’s European income.

Amazon has minimised its tax bill by having a US company that owns its technology licenses, then leases the rights to re-license the technology to a tax-exempt partnership based in Luxembourg.

Should the EU investigation prove state aid, the company would face a substantial bill from Luxembourg.

But in the face of the Diverted Profits Tax, which imposes a 25% levy of profits leaving the UK, the company has begun booking its UK sales on-shore from the start of this month.

An Amazon spokesman told The Guardian that the company was “now recording retail sales made to customers in the UK through the UK branch. Previously, these sales were recorded in Luxembourg”.

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