LONDON May 9 Amazon.com Inc filed
accounts on Friday showing a UK tax bill of 10 million pounds
($16.95 million) despite $7.3 billion sales in Britain, because
the company reports most of its European profit in a tax-exempt
Amazon.co.uk Ltd reported a 56 percent rise in profit to 17
million pounds ($28.82 million) during 2013 on a 13 percent rise
in UK revenues, which one academic said could mean the company
came under pressure from the UK tax authority to change its tax
Corporate tax avoidance has become a hot topic in Europe
following revelations in the past couple of years about how
companies like Apple and Google pay little
tax in many of their main markets.
Amazon said it follows all the tax rules in every country
where it operates. Apple and Google also say they pay all the
tax they should. HMRC declined comment.
All Amazon customers in Europe contract directly with and
pay Luxembourg based Amazon companies for the goods and services
they buy. These companies reduce their taxable income by paying
fees to a tax exempt partnership, also based in the Grand Duchy.
Amazon.co.uk is funded by its Luxembourg-based affiliates.
The rates of such inter-company remuneration are usually agreed
with the UK tax authority. In 2013, intercompany fees paid to
Amazon.co.uk Ltd rose 40 percent to 449 million pounds.
The result was that Amazon's current tax bill for 2013 was
its biggest ever.
"It's possible Amazon may have come under pressure from HMRC
(the UK tax authority) to adjust their inter-company
agreements," Prem Sikka, Professor of Accounting at Essex
The amount of money Amazon.com Inc reports through the
tax-exempt partnership that sits atop its European corporate
structure has dropped sharply in the past two years, after the
U.S. tax authority tightened rules it felt were being abused to
A Reuters Special Report on Amazon's European structure is
available at: here
($1 = 0.5899 British Pounds)
(Reporting by Tom Bergin; Editing by Elaine Hardcastle)