Amazon had a tax bill of 1.7 million pounds on profits of 72.4 million pounds. Amazon is now facing criticism after its British tax bill fell 1.7 million pounds ($2.2 million) despite a big jump in sales and profits.
Records show that Amazon U.K. Services Ltd. faced a 2017 tax bill of 4.6 million pounds thusly paying a lower sum and adjourning the rest.
On Thursday, the tax affairs reported Amazon’s largest profit of $2.5 billion in the second quarter. Its pre-tax profits were 72.4 million pounds; almost triple of the earlier year’s 24.3 million pounds and eventually raising the revenue from 1.46 billion to 1.99 billion pounds.
The low Amazon U.K. tax bill is due partly to the way the European Union works where multinationals like Amazon have their tax base and hence has a very-low tax regime. Earnings of the multinationals from all around are registered in that country which means that companies like Amazon end up paying very little tax.
Out of the many multinational groups, Amazon is one of the groups that have been charged by EU for arranging unusually advantageous tax deals with the EU country.
Unlike a few European countries, Britain agrees to take in account of certain companies for generous deductions of stock options and share awards, especially in the technology sector, and use the rules to reduce their tax bills significantly.
Most of the 11.4 billion UK revenues have been booked by Amazon groups via a UK branch of Luxembourg-based Amazon EU Sarl this subsidiary had a tax bill of 54.9 million euros ($63.7 million) last year.
We pay all taxes required in the UK and every country where we operate. – Amazon
In order to tackle the tech giant’s tax planning, lawmakers of UK and other countries have proposed new forms of taxes including additional taxes on revenues hoping that such measure will have some impact on Amazon as it operates on low or negative profit margins in Europe.