Amazon to pay UK tax on sales
Amazon has announced it will start to pay a fairer rate of tax here in the UK.
This move by the online retail giant is in no small part thanks to you and the work of thousands of other campaigners in the wider tax justice movement all of whom have piled the pressure onto Amazon and the UK government.
In a statement released last week the company said it has started to book retail sales through its UK branch, ending the practice which saw them route sales through a Luxembourg subsidiary.
This is a huge breakthrough in the fight for tax justice and huge u-turn for a company that said just a year ago that it would be impossible to route sales to UK customers through a British company paying tax to HMRC.
In the rest of Europe
It has also been reported that Amazon will be doing the same throughout the EU. "As of 1 May, Amazon EU Sarl is recording retail sales made to customers through these branches in the UK, Germany, Spain and Italy... Previously, these retail sales were recorded in Luxembourg."
Amazon added that it was "working on opening a branch for France".
In more good news the EU has said that it will continue its investigation into Luxembourg's tax treatment of Amazon despite the changes.
The Commission launched an investigation last October into alleged state aid Luxembourg was granting to Amazon by offering a low corporate tax rate on European profits.
"The Commission's state aid investigation is ongoing and will continue. We are examining the concerns that the tax ruling granted by Luxembourg to Amazon is providing the company with selective advantages," the Commission spokesman Ricardo Cardoso told Reuters.
Stay on the boycott
We are urging people to continue with the Amazon boycott for the time being because this announcement, on its own, is no guarantee that the company will play fairly with the tax authorities.
It is not currently obliged to publish income and expenditure for this UK subsidiary, so there is likely to be no way for the public to scrutinse whether profits occuring here look genuine. It could, for example, use transfer pricing or intellectual property arrangments to reduce UK profits to zero if it wanted.
We call on Amazon to undertake to publish full country-by-country financial reporting (to standards recommended by the OECD) in order for the general public to regain trust that its financial arrangments are not structured to continue avoiding paying its fair share of tax. This should be the point for the boycott to be called off.
It is fair to say that this is a battle well won, but the war is far from over.