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Amazon paid no corporate tax in Luxembourg


Amazon had a record year in Europe in 2020, as the web giant posted revenue of 44 billion euros as people shopped from home during the pandemic. But the company ended up paying no corporate tax in Luxembourg, where the company is headquartered in Europe.

The company’s European retail division reported a loss of 1.2 billion euros ($ 1.4 billion) to Luxembourg authorities, according to a recent financial file, making it exempt from corporate tax. The loss, which was in part due to discounts, advertising and the cost of hiring new employees, also meant the company received € 56 million in tax credits that it could use to offset future tax charges when it makes a profit, depending on the record. , published in March.

Amazon was in compliance with Luxembourg regulations, and it pays taxes to other European countries on the profits it makes on its retail operations and other parts of the business, like its distribution centers and cloud services.

But the depot is likely to provide new ammunition for European policymakers who have long tried to force US tech giants to pay more taxes. And the Biden administration is pushing for changes in global tax policy as part of an effort to raise taxes on large corporations, which have long used complicated maneuvers to avoid or reduce their tax obligations, including shifting their profits. to low-tax countries, such as Luxembourg. , Ireland, Bermuda and the Cayman Islands.

President Biden has said he aims to raise up to $ 2.5 trillion over 15 years through measures such as raising corporate tax rates to 28% from 21% and imposing ‘a minimum tax on global profits.

Already, France has levied a 3% tax on revenues from digital services provided in the country, an effort to extort some revenues from internet companies – a tax Amazon says it pays – but policies across the country European Union were thwarted by opposition from Washington.

In its dossier, covering 2020, Amazon avoids paying Luxembourg corporate tax, which is a tax on profits. In 2020, Amazon’s global international segment reported operating profit of $ 717 million. And in the first three months of this year, all of the company’s profits climbed to $ 8.1 billion, an increase of 220% over the same period last year. Documents filed by Amazon for the first quarter, released last week, also showed it achieved $ 108.5 billion in sales, up 44% as more customers made purchases in online due to the pandemic.

The company’s filing with Luxembourg was reported earlier by The Guardian.

Amazon spokesperson Conor Sweeney said the company has paid all required taxes in each country in which it operates.

“Corporate tax is based on profits, not income, and our profits have remained low given our heavy investments and the fact that retail is a highly competitive, low-margin business,” said he declared.

Amazon has already paid taxes in Luxembourg, although European regulators have said the payments are less than the company’s fair share. In 2017, European competition regulators ordered Luxembourg to claim around € 250 million in unpaid taxes from 2006 to 2014 from Amazon. Amazon and Luxembourg have appealed the ruling and a judgment from Europe’s second highest court is expected next week.

Margaret Hodge, a British MP, said Amazon deliberately created financial structures to avoid taxes. “It is obscene that they feel that they can make money all over the world and that they have no obligation to contribute to what I call the common pot for the common good”, she declared.

Matthew Gardner, a senior researcher at the Institute on Taxation and Economic Policy, a left-wing research group in Washington, said Amazon’s Luxembourg dossier showed why there was such an emergency, not only in the European Union but also in the United States, to require a global minimum tax.

“It’s a stark reminder of the high financial stakes of inaction,” he said.



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