'The big six US tech firms have been accused of “aggressively avoiding” $100bn (£75bn) of global tax over the past decade.
Amazon, Facebook, Google, Netflix, Apple and Microsoft have been named in a report by tax transparency campaign group Fair Tax Mark as avoiding tax by shifting revenue and profits through tax havens or low-tax countries, and for also delaying the payment of taxes they do incur.
The report singles out Amazon, which is run by the world’s richest person, Jeff Bezos, as the worst offender. It said the group paid just $3.4bn (£2.6bn) in tax on its income so far this decade despite achieving revenues of $960.5bn and profits of $26.8bn. Fair Tax Mark said this means Amazon’s effective tax rate was 12.7% over the decade when the headline tax rate in the US has been 35% for most of that period.
To drive out the tax avoiders, the EU must reimburse states that depend on them
Amazon said the report’s “suggestions are wrong” and that the company had “a 24% effective tax rate on profits from 2010-2018”. Amazon said the company’s “profit margins are low” and that “naturally results in a lower cash tax rate.”
Fair Tax Mark said Amazon’s accounting was so complicated there was “no way to discern” how much tax Amazon should be paying or is paying in the UK despite its filings to the US tax authorities showing it made $14.5bn in revenue in the UK last year, and $75.8bn over the decade.
Amazon’s two UK subsidiaries – Amazon UK Services and Amazon Web Services UK - had combined tax bills of only £83m over the decade, as the bulk of sales are booked via Luxembourg. Amazon UK Services arm paid £14m in corporation tax last year.Paul Monaghan, chief executive of Fair Tax Mark, said: “Our analysis of the long-run effective tax rate of the Silicon Valley Six over the decade to date has found that there is a significant difference between the cash taxes paid and both the headline rate of tax and, more significantly, the reported current tax provisions. We conclude that the corporation tax paid has been much lower than is commonly understood.”
Read more: New study deems Amazon worst for 'aggressive' tax avoidance
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