Amazon Tax Pay Reignites Digital Tax Row

E-commerce giant Amazon has been accused of paying less tax in the UK over a 20 year period, than some major UK retailers pay in a single year.

An investigation by the Mirror newspaper found that Amazon UK Services paid £61.7m in UK corporation tax over a 20 year period, during which time it achieved £7bn in total revenues over the two decades.

The revelation has re-ignited the debate as to whether tech firms are paying their fair share of tax, and whether countries are right to tax these firms which are headquartered in overseas territories.

Tax payments

Amazon’s payment of £61.7m in UK corporation tax over a 20 year period stands in marked contrast to some established UK high street retailers.

Marks & Spencer for example reportedly paid £65.4 million in corporation tax in the last year alone, and a whopping £3.3 billion in corporation tax over the last two decades, the newspaper reported.

Tesco’s corporation tax bill last year meanwhile was £176 million.

Shadow chancellor John McDonnell of course took the opportunity to have a swipe at the Conservative party, saying they had allowed multinational companies to ‘exploit’ communities, the Metro newspaper reported.

“With our high streets struggling to survive and public services on their knees, it’s sickening that companies are still getting away with what appears to be aggressive tax-dodging,” McDonnell reportedly said.

Digital tax

But changes are afoot and soon many countries will require tech firms to pay more in taxes.

The European Union for example will reportedly reach an agreement by March to implement a digital services tax.

The EU digital tax had been defeated in its previous form, due to opposition by Ireland, Scandinavian countries and Luxembourg. It needs unanimous approval by member states.

The European Union tax was only intended as an interim measure until a consensus was reached by the Organisation for Economic Co-operation and Development (OECD), across the world.

Frustrated at the delay, France implemented on 1 January 2019 a digital tax on tech giants such as Amazon, Google and Facebook after the European Union had failed to reach a compromise agreement before Christmas.

The UK has also proposed a national digital tax.

These moves come amid accusations that governments are failing to take action to rein in large tech companies, which are seen as paying minimal tax in Europe due to their use of accounting loopholes.

For their part, tech companies have previously defended their tax structures, and insist they abide by tax laws as they’re currently written.

But British MPs have previously criticised tech companies’ tax arrangements as “immoral”.

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Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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