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Amazon services arm pays £14m in UK taxes despite revenues of nearly £3bn

MADRID, SPAIN - 2020/08/31: Amazon logo at a logistic centre. Amazon has ordered 1,800 electric vans from Mercedes-Benz for delivery in Europe. (Photo by Marcos del Mazo/LightRocket via Getty Images)
Amazon UK Services employs more than two-thirds of Amazon’s more than 30,000 workers in the UK. Photo: Marcos del Mazo/LightRocket via Getty Images

Amazon’s (AMZN) UK services arm paid just £14.5m ($16.1m) in UK corporate taxes in 2019 despite generating revenues of nearly £3bn in the country, according to the company’s latest accounts.

The technology giant’s tax bill at the division rose by just 3% last year, even as pre-tax profits at Amazon UK Services rose by 35% to £102m.

The company primarily consists of the e-commerce giant’s warehouse and logistics operation, and does not include revenue from Amazon’s retail arm, whose accounts were published earlier in the year.

Amazon UK Services nonetheless employs more than two-thirds of Amazon’s more than 30,000 workers in the UK.

READ MORE: Facebook pays France €106m in back taxes as digital tax row rumbles on

“The UK has now become one of Amazon’s largest global hubs for talent and this year we announced plans to create 10,000 new jobs in the country by the end of 2020,” an Amazon spokesperson said in a statement.

“We pay all taxes required in the UK and every country where we operate, and focusing on one small piece does not provide a full picture of Amazon’s overall contribution to the UK,” Amazon said.

“Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and we continue to invest heavily.”

In a blog post published on Tuesday, Amazon noted that it paid £293m in taxes in the UK on revenues of £13.7bn in 2019.

This figure includes includes National Insurance contributions, business rates, corporate taxes, import duties, and stamp duty, the company said.

The details of Amazon’s tax contributions come amid increasing tensions about digital giants and tax avoidance.

READ MORE: Treasury denies reports it will drop digital tax

The UK Treasury was forced to deny reports that it plans to axe a recently introduced tax on technology companies, which sees firms subjected to a 2% tax on their UK-generated revenues.

The digital services tax was introduced in April as talks at an international level to introduce a similar global levy stalled.

Under the proposals, large global firms would be taxed on their revenue or sales in a particular country, rather than on their profits, which are often booked in lower-tax jurisdictions.

But talks collapsed after the US essentially withdrew from negotiations.

“The United States does not want to continue negotiations on digital taxation at the OECD,” French finance minister Bruno Le Maire said in June.