Amazon forces sellers to pay its Digital Services Tax
Amazon has increased the fees paid by small businesses and other sellers on its site to pass on the cost of the Digital Services Tax introduced by the UK Government from 1st September.
The company, which has a market value of over $1 trillion, increased UK fees by 2%, matching the new taxation. By passing the taxes on to its users, Amazon is directly forcing small businesses to pay the cost of its tax avoidance.
38 Degrees says,
“By the time you finish this sentence, Amazon boss Jeff Bezos will have made £12,000 ... At a time when these businesses are struggling to get by, it’s an indefensible decision.”
The Digital Services Tax is aimed at ensuring that search engines, social media services and online marketplaces like Amazon are paying their share of taxes.
It follows ongoing repeated criticism of Amazon for its tax avoidance practices. In 2018, the company paid just £220 million in direct UK taxes, despite revenues in the country amounting to £10.9 billion.
We recently estimated that the UK had lost over £1 billion in taxes from the profit shifting of Google, Facebook, Microsoft, Apple and Amazon in 2017.
Companies generally pay taxes based on the amount of profit they register in a country. But because tech companies often trade in intangible things like patents that can be located anywhere, it is easy for them to register their profits in tax havens and avoid paying in higher tax countries even if they have substantial business there.
The Digital Services Tax instead looks at sales made in a country – making it an important step towards taxing tech companies fairly.
Ethical Consumer has a boycott call against Amazon for its tax avoidance.
We are also campaigning for the digital service tax to be increased to 10%, to ensure that those profiting from the coronavirus pandemic are also helping bear the cost – see our feature.