Amazon pays £492m in UK tax

E-commerce giant Amazon divulged its latest financial results and said in a statement that it is proud of its share to the United Kingdom economy and paid £492 million in direct taxation.

Amazon, like other tech companies, faced scrutiny over the undervaluation of their taxes.  The company’s sales climbed 50% to £20.63 billion due to  the high volume of online sales due to the pandemic. However, it only paid just 3.8 million more in tax compared to 2019’s corporation tax, even though sales increased by 1.89 billion. 

Amazon’s tax bill was very low and disproportionate to its sales, unlike supermarket chains whose sales proportion was taxed much higher. Accounting professor emeritus Prem Sikka of University of Sheffield and University of Essex said that there needs to be a complete change in accounting regulations to make tax reporting more transparent.   

Furthermore, he said that the accounts are legally compliant but lack transparency such as information on intra-group transactions, which makes it difficult to know their true economic profit.

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