In May, Amazon announced that it would stop routing its European sales through Luxembourg and would start reporting its sales in the UK, Germany, Italy and Spain. This means you will have to pay taxes in these countries.
This could bring a little extra bang for the buck in the countries involved. For example, in 2014, Amazon reportedly sold £5.3 billion in the UK, up 14 percent on the previous year, but paid just £11.9 million in tax.
The reason is simply that they declare their sales and profits in Luxembourg. So their UK registered company, Amazon.co.uk Limited, made a profit of just £34.4 million in 2014.
controversial structure
Amazon also points out that Amazon.co.uk Limited does not sell directly to consumers in the UK. That portion is handled by the company’s Luxembourg-based operations, Amazon EU Sarl, which also handles sales in Germany, France and several other European countries.
Amazon.co.uk Limited, which has a more modest turnover of £679m, instead provides the company's distribution and miscellaneous business services in Luxembourg.
A highly controversial structure used by several other big tech companies to avoid paying taxes in individual countries. It has also led the European Union to launch a review of Amazon’s tax agreement with Luxembourg.
source: The Guardian
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