Amazon is paying just 4.5 per cent tax on its European profits after directing its sales through the tax haven of Luxembourg, accounts seen by The Mail on Sunday show.
Last week the internet retail giant faced criticism after its UK accounts showed very low levels of reported sales and profits here, despite British consumers accounting for about half its sales in Europe.
The Luxembourg figures, unearthed by MoS, confirm suspicions that official British profits are a tiny proportion of full profits, and that by shifting earnings to the Continent, Amazon is avoiding a much higher tax bill.
Accounts filed at Luxembourg’s companies register show the group paid €2.2million (£1.8million) in tax on total profits of €49million from its European online sales.
The rate is a fraction of the 24 per cent it would be liable to pay if it registered the profits in Britain.
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Amazon has two main companies in Luxembourg handling sales from its websites. Amazon EU Sarl recorded €12 billion of European sales in 2012, making a loss of €68million. Amazon Europe Holding Technologies, which owns intellectual property rights to the company’s European websites and collects fees from all Amazon’s operations, made a profit of €117million.
The figures will heap pressure on the retailer after claims last week that its British activities were far more extensive than it claimed.
Its structure is being challenged by US and French tax authorities, and the company has said Revenue & Customs ‘is or may be’ looking at its tax returns from 2003 on. Amazon and Google have become the target of public and political fury.
Google’s European vice-president, Matt Brittin, faced a fresh grilling from MPs on the Public Accounts Select Committee last week when he denied claims it was actively selling in the UK, arguing that sales are carried out in Dublin and that UK staff merely support that business.
An Amazon spokesman said: ‘We pay all applicable taxes in every jurisdiction we operate in. We have a single European headquarters in Luxembourg with hundreds of staff to manage this complex operation.’