Amazon in the US are using a loophole in the EU to reduce their tax burden.
They are claiming to be a 'distribution service' in the UK for Amazon based in Luxembourg.
Google the story in The Guardian.
It is shocking.
I think they effectively bypassed paying Corporation tax of approx £500M and paid something like £5.5M.
They have then used the 'loss' in EU to offset against paying their US burden, and reduced their payments to the US economy. I was unimpressed.
here is a section for you guys in the US; I'll post the article link below.
In its most recent SEC annual filing, Amazon admits: "The effective tax rate in 2011, 2010, and 2009 was lower than the 35% US federal statutory rate primarily due to earnings of our subsidiaries outside of the US in jurisdictions where our effective tax rate is lower than in the US. Such earnings primarily relate to our European operations, which are headquartered in Luxembourg."
Amazon is currently disputing a tax bill of nearly £1bn imposed by US authorities relating to transfer pricing – a mechanism used by multinationals to trade goods and services among group companies.
It is also under fire in the US as it does not collect any sales taxes on products sold in states where it does not have an office or warehouse. It is believed to only collect sales tax in five states, but other states are now planning to alter state legislation to impose the sales tax on the company.