EU: Amazon starts European corporate tax payments

Amazon’s decision to change its tax-efficient European business structure could raise its tax bill by as much as $100 million a year but authorities will have to fight for additional money and any payments will be hidden from public view.

Amazon has become one of the highest profile targets of an international drive against tax avoidance that has gained pace in Europe in recent years.

The company has historically paid little tax in Europe because its clients did business online with Luxembourg-based companies, the biggest of which is Amazon EU Sarl. Consequently, authorities across the continent could not use its sales revenues as a basis for assessing tax.

That’s why Amazon’s main German operating unit paid just 11.9 million euros in tax in 2014, despite the group recording $11.9 billion in sales to German customers last year.

But Amazon said at the weekend that from May 1, it had started to book sales in the UK, Germany, Italy and Spain via local branches of Amazon EU Sarl.

“Amazon will have to pay more tax … (but) I think the amount of additional tax paid will be very small,” said Chas Roy-Chowdhury, Head of Taxation at accounting group ACCA.

Full content: The Economic Times

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