Home Business Amazon paid no corporate tax in Luxembourg

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.

Amazon had a document 12 months in Europe in 2020, as the online large posted income of 44 billion euros as individuals shopped from residence in the course of the pandemic. However the firm ended up paying no corporate tax in Luxembourg, the place the corporate is headquartered in Europe.

The corporate’s European retail division reported a lack of 1.2 billion euros ($ 1.4 billion) to Luxembourg authorities, based on a current monetary file, making it exempt from corporate tax. The loss, which was in half attributable to reductions, promoting and the price of hiring new staff, additionally meant the corporate acquired € 56 million in tax credit that it might use to offset future tax costs when it makes a revenue, relying on the document. , printed in March.

Amazon was in compliance with Luxembourg laws, and it pays taxes to different European international locations on the income it makes on its retail operations and different components of the enterprise, like its distribution facilities and cloud providers.

However the depot is probably going to supply new ammunition for European policymakers who’ve lengthy tried to power US tech giants to pay extra taxes. And the Biden administration is pushing for adjustments in international tax coverage as a part of an effort to lift taxes on giant firms, which have lengthy used sophisticated maneuvers to keep away from or scale back their tax obligations, together with shifting their income. to low-tax international locations, resembling Luxembourg. , Eire, Bermuda and the Cayman Islands.

President Biden has stated he goals to lift as much as $ 2.5 trillion over 15 years by means of measures resembling elevating corporate tax charges to twenty-eight% from 21% and imposing ‘a minimal tax on international income.

Already, France has levied a 3% tax on revenues from digital providers supplied in the nation, an effort to extort some revenues from web corporations – a tax Amazon says it pays – however insurance policies throughout the nation European Union had been thwarted by opposition from Washington.

In its file, protecting 2020, Amazon avoids paying Luxembourg corporate tax, which is a tax on income. In 2020, Amazon’s international worldwide section reported working revenue of $ 717 million. And in the primary three months of this 12 months, the entire firm’s income climbed to $ 8.1 billion, a rise of 220% over the identical interval final 12 months. Paperwork filed by Amazon for the primary quarter, launched final week, additionally confirmed it achieved $ 108.5 billion in gross sales, up 44% as extra prospects made purchases in on-line because of the pandemic.

The corporate’s submitting with Luxembourg was reported earlier by The Guardian.

Amazon spokesperson Conor Sweeney stated the corporate has paid all required taxes in every nation in which it operates.

“Corporate tax is predicated on income, not revenue, and our income have remained low given our heavy investments and the truth that retail is a extremely aggressive, low-margin enterprise,” stated he declared.

Amazon has already paid taxes in Luxembourg, though European regulators have stated the funds are lower than the corporate’s justifiable share. In 2017, European competitors regulators ordered Luxembourg to assert round € 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 courtroom is anticipated subsequent week.

Margaret Hodge, a British MP, stated Amazon intentionally created monetary constructions to keep away from taxes. “It’s obscene that they really feel that they will earn a living all around the world and that they’ve no obligation to contribute to what I name the widespread pot for the widespread good”, she declared.

Matthew Gardner, a senior researcher on the Institute on Taxation and Financial Coverage, a left-wing analysis group in Washington, stated Amazon’s Luxembourg file confirmed why there was such an emergency, not solely in the European Union but in addition in the USA, to require a worldwide minimal tax.

“It is a stark reminder of the excessive monetary stakes of inaction,” he stated.

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Felix Alexander
Felix Alexander
Felix spent a few years in the health industry and the experience has given him so much authority when it comes to writing content in the category. He is also the right person to approach if you want to discuss health and fitness-related topics.You can get in touch.

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