Amazon's European retail business pays just £15m in tax

The online goliath’s figures revealed in the latest accounts for its European online business reignite the debate over US tech firms minimising the tax they pay on the Continent by using cross-border arrangements.

Amazon Europe is based in Luxembourg, where the etailer aggregates the sales it makes from countries across the Continent.

It reported a pre-tax profit of €59.6m (£54m) last year, meaning it had a tax bill of just €16.5m (£14.95m).

An Amazon spokesman said: “Amazon pays all the taxes that are required in every country where we operate.

“We operate a pan-European business from our headquarters in Luxembourg where we have over 1,500 employees and growing, including our senior leadership team.

“We’ve invested over €20bn in Europe since 2010, and expect to hire 15,000 new employees this year, bringing our total permanent European workforce to over 65,000 people.”

The company’s warehouse and logistics business, Amazon UK Services, paid a corporation tax bill on £7.4m in 2016 – down from £15.8m the previous year.

That division grew revenue from £946m to £1.46bn during the year, but pre-tax profits halved from £48m in 2015 to £24m last year.

For accounting purposes, Amazon Services UK files its turnover as a charge to its parent company for delivering the products it sells.

Revenue from Amazon’s UK retail sales are reported via a separate company based in Luxembourg, but filings in the US suggest its revenues in Britain hit £7.3bn in 2016.

Back in 2015, Amazon said it would put an end to the practice of using corporate structures that divert sales and profits away from the UK.

It came amid a clampdown from the Government, following the introduction of then-Chancellor George Osborne’s diverted profits tax.

Ticketmaster tussle

Separately, Amazon could strike a deal with venue owners in the US to sell tickets to events.

This would represent a move into another new market in its homeland – and see Amazon throw down the gauntlet to Ticketmaster, which currently dominates the market in the US.

Ticketmaster is the exclusive seller of tickets for many US venues. It raked in $1.6bn in revenue in 2016.

But according to Reuters, Amazon is in talks to offer a similar event ticketing service in the US, believing there is a gap in the market for a new entrant.

Amazon already has some experience at selling tickets in the UK, having sold tickets for West End shows for two years.