Business

Amazon's sales reporting change could raise tax bill

Amazon package Image copyright PA
Image caption Amazon has attracted criticism for adopting complex corporate structures to reduce its tax bill

Amazon, the global online retailer, is changing the way it records sales in a move that could see it paying more tax.

Transactions carried out in European markets were previously recorded in Luxembourg, with which Amazon had a low-tax agreement.

Now sales made through subsidiaries in the UK, Germany, Spain and Italy will be registered in those countries, the retailer has said.

Amazon had received heavy criticism for its tax avoidance policies.

"More than two years ago, we began the process of establishing local country branches of Amazon EU Sarl, our primary retail operating company in Europe," the company said in a statement.

"As of 1 May, Amazon EU Sarl is recording retail sales made to customers through these branches in the UK, Germany, Spain and Italy.

"Previously, these retail sales were recorded in Luxembourg."

Amazon added that it was "working on opening a branch for France".

In recent years, the European Union has intensified its investigations into the tax deals negotiated by global companies with countries such as Ireland, Luxembourg and the Netherlands.

It suspects that such deals amount to illegal state aid and distort competition.

Last year, the European Commission - the EU's executive arm - launched a formal investigation into Amazon's tax arrangements with Luxembourg.

And the EU is also looking into tech giant Apple's tax dealings in Ireland, coffee-shop chain Starbucks' dealings in the Netherlands, and Italian carmaker Fiat's agreement with Luxembourg.

More on this story