How Amazon Makes Billions In The United Kingdom Without Paying Any Corporate Taxes

Online retailer Amazon has received a lot of well-deserved flak in the U.S. facilitating tax dodging by its customers by refusing to collect sales tax, under the theory that it only has to collect sales tax in states where it has a physical presence. This, of course, lets Amazon undercut traditional retailers. Several states have passed laws (in the face of intense Amazon lobbying) requiring online sales to be taxed the same as sales at brick and mortar stores.

But Amazon has reportedly been doing some tax dodging of its own in the United Kingdom, managing to make £7.6 billion in sales over the last three years without paying any corporate income tax:

Regulatory filings by parent company with the US securities and exchange commission (SEC) show the tax inquiry into the UK operation, which sells nearly one in four books sold in Britain, focuses on a period when ownership of the British business was transferred to a Luxembourg company.

The SEC filings, highlighted by Bookseller magazine, show that in the past three years, Amazon has generated sales of more than £7.6bn in the UK without attracting any corporation tax on the profits from those sales.

Amazon was able to pull this bit of tax trickery by registering all of its corporate profits in Luxembourg, a notorious corporate tax haven, calling its UK business simply a delivery service.


Of course, Amazon is hardly alone in shifting money around to different countries to dodge taxes. Google, for instance, drove its U.S. tax rate all the way down to 2.4 percent by accounting for its profits in Ireland and islands in the Caribbean. 30 major corporations in the U.S. made $160 billion over the last three years, but paid no taxes thanks to a variety of loopholes and tax evasion.