Amazon changes European sales reporting structure

Amazon is changing the way that it records sales in European countries. Previously, Amazon recorded transactions carried out in Europe in Luxembourg, with which the e-commerce giant had a low-tax agreement. Now, however, sales made through Amazon’s subsidiaries in the UK, Germany, Spain and Italy will be registered in those countries – and the company will therefore pay the tax in those countries.

There has been considerable criticism in European countries of large multinational companies which are perceived to be avoiding taxes – and Amazon has been one of the most conspicuous targets of this opprobrium.

A statement issued by Amazon suggested that the move was part of an ongoing strategy put in place some time ago – and not just a reaction to the public censure.

“More than two years ago, we began the process of establishing local country branches of Amazon EU Sarl, our primary retail operating company in Europe,” said the Amazon statement. “As of 1 May, Amazon EU Sarl is recording retail sales made to customers through these branches in the UK, Germany, Spain and Italy.”

However, a reported filed by The Guardian on Saturday (23 May) speculated that “the move will allow Amazon to avoid being caught by chancellor George Osborne’s new diverted profits tax, which came into law from April. It imposes a punitive 25% tax on groups deemed to be artificially routing profits overseas.”