About Amazon


Why Amazon?

 

In 2014, Amazon's UK subsidiary paid £11.9m in corporate taxes on sales of £5.3 bn - a rate of less than 0.3%. 

 

Amazon Warehouse. Photo Credit: Scott Lewis, Flickr. 

 

These tax dodging activities aren't illegal but we agree with the MP's who attacked these companies calling their accounting shenanigans “immoral”.

Amazon, Google and Starbucks all stand accused of avoiding paying millions of pounds in tax by operating their UK businesses from countries with lower tax rates. 

What sets Amazon apart though is that their whole business model appears to be built around using tax avoidance as a way to help make their prices among the cheapest online.

Amazon successfully transferred ownership of the main UK business to the Luxembourg-based company Amazon EU Sarl back in 2006. Luxembourg was number 3 on the Tax Justice Network's list of damaging secrecy jurisdictions in 2011. The Guardian estimated that the company may have avoided paying a tax bill of around £100 million between 2009 to 2012.  
 

For this reason we've singled out Amazon to be the subject of a boycott. 

Amazon: Company Profile

Amazon is an arch tax avoider and is now the subject of a global boycott call by Ethical Consumer.


 

The world's biggest online retailer is generating huge revenues in the UK but paying very little corporation tax. It does this by funnelling money through its holding company in the notorious tax haven of Luxembourg.

Last updated: October 2015

Annual Revenue$48.07 billion a year

 

Other BrandsLovefilm.com, Kindle, Audible.com, Abe Books

 

Company Score  2 out of 20

 

Ethical Consumer Best Buy?No

 

Ethical issues by category

Amazon has faced criticism for more than just its tax avoidance.

For example the company is know to use Foxconn. This notorious Chinese supplier has come under attack for its appalling treatment of workers. The media spotlight was turned on the company in 2012 after a spate of worker suicides but campaigners have long worked towards improving conditions in their factories.

Closer to home Amazon has used a union busting consultancy firm to undermine the work of trade unions at its UK operations. Amazon hired the American firm The Burke Group to stop workers organising around it UK warehouses. According to the TUC "the tactics used by union busters are designed to frighten and intimidate workers away from any union attempt to recruit them at work."

The company also scores Ethical Consumer's worst rating for supply chain management.

 

Amazon receives our worst rating for environmental reporting. Here's why:

The company's environmental policy contained a section entitled 'Amazon and Our Planet' which detailed positive steps the company had taken in reducing the environmental impact of its packaging, examples of environmental improvements made at various sites and information about its planned eco-friendly headquarters.

However there was no detailed company-wide information on environmental performance. In addition there was no mention of energy use or shipping methods which showed a lack of understanding of the company's environmental impacts. Furthermore there were no dated targets for future improvement.

The company scores badly on our ratings system for the sale of products, such as cosmetics, that have been tested on animals. It also picks up marks for selling whale meat products on it Japanese website.

In August 2015 Ethical Consumer viewed Amazons 2014 10-K filing for the US Securities and Exchange Commission. This showed that the company was incorporated in Delaware (USA), considered a tax haven by Ethical Consumer at the time of writing. The filing also included a list of significant subsidiaries considered to be at high risk of being used for tax avoidance purposes due to the company type. This included Amazon Europe Holding Technologies SCS, located in Luxembourg. Amazon therefore received Ethical Consumer's worst rating for likely use of tax avoidance strategies.

In 2015 the companies tax structure was under investigation by the European Commission. In addition in 2014, Amazon paid $318,362 to political parties in the US. The company also spent $3,456,8361 on lobbying in 2013 and $1,890,000 in 2014. The top issues it had lobbied on were taxes, computers & information, consumer product safety, copyright patent & trademark and postal.

In Depth Information

See the Amazon company page for detailed company information, background stories behind the ratings direct from our Corporate Critic database, and 'email the company' tool.

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