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Amazon restructures tax paying practices in Europe

RBR Staff Writer Published 26 May 2015

Amazon.com has restructured its tax practices in Europe and decided to pay taxes in individual countries in the continent, instead of reporting it through Luxembourg based subsidiary.


The e-commerce retailer has started paying tax on its retail sales in individual European countries including the UK, Germany, Italy and Spain, according to Bloomberg.

Amazon is facing probe over its tax practices and accused of reporting its tax through its Luxembourg-based entity, to lower its dues.

The move is expected to boost the company's tax bill in many EU countries, while it could presurize other companies to implement similar practices.

This comes in reponse to EU's ongoing investigations into multinational companies' tax system in individual EU countries, to ensure compliance with EU state aid rules.

The EU has launched several probes into the tax structures of companies such as Apple and Starbucks, in addition to Amazon citing that these companies may have benefited from illegal tax breaks.

The regulators are also looking into the tax-shifting strategies of these companies.

Earlier in January this year, EU regulators announced that Amazon's tax structure in Luxembourg could provide an illegal and unfair advantage over competitors.

Amazon spokesman said: "We regularly review our business structure to ensure that we are able to best serve our customers and provide additional product and services."

The company said that it paid $6.2m in taxes in the UK on £449m revenues generated in 2013.

Image: Amazon.com CEO Jeff Bezos. Photo: courtesy of Steve Jurvetson / Wikipedia.