Wednesday 11 August 2021 3:23 pm

Amazon transfers £8.2bn of UK revenue to Luxembourg, report says

Amazon has shifted some £8.2bn worth of UK revenues to European tax haven Luxembourg, a new report has claimed, as the ecommerce giant bats off calls for a tax inquiry.

The retail heavyweight declared £13.7bn in UK revenues in 2019, however, filings for its UK-based companies said it only reported £5.5bn in sales.

The report, commissioned by union Unite and backed by Labour MP and Treasury committee member Emma Hardy, found that Amazon posted €57bn of revenue based in Luxembourg in 2019.

And with the population of Luxembourg a little under 614,000 – the revenue raked in from the small country would mean Amazon had sold an average of €92,000 worth of goods and services to each resident.

The report, led by former Deloitte tax expert Vivek Kotecha, argued that Amazon has been given a leg up through legally shifting profits to country’s with more favourable tax conditions.

Amazon rejected the allegations, saying that the calculations are “wildly inaccurate and do not include the bulk of our business.”

“Our UK retail and AWS [Amazon Web Services] revenues are recorded here in the UK and reported directly to HMRC. Our total tax contribution in the UK was £1.1bn during 2019 – £293m in direct taxes and £854m in indirect taxes.”

The union’s researchers calculated that the company had paid a maximum of £84m in tax on its profits – based on Amazon’s public statements on Companies House, some £46m less than was would have been anticipated.

However, a spokesperson for the company said that not all of Amazon’s accounts are available on Companies House.

UK sales, Luxembourg companies

Sales in the UK through local branches of Luxembourg companies will ultimately be attributed to Luxembourg-based parent companies.

When a UK shopper buys a product on Amazon’s UK website, they are billed by a UK division of a Luxembourg-registered company called Amazon EU Sarl.

Amazon EU Sarl posted an annual revenue of €32.2bn in 2019, an average of €7.5m for each employee on its 4,302 strong workforce.

In the UK, Amazon’s three key holdings reported an average of €207,000 of revenues per employee – suggesting Amazon’s employee in Luxembourg are 36 times more productive than their UK counterparts.

“This report is really worrying. It can’t be right that Amazon takes just two days to pay its tax bill – compared to 150 days for the average UK taxpayer,” Emma Hardy said.

Hardy added that she backed calls for a public inquiry into Amazon’s tax to “see how we can make things fairer and more transparent”.