A new report by the Fair Tax Mark has accused six major US tech firms of avoiding $100 billion (£75 billion) in global taxes over the past decade, singling out Amazon as the worst offender. The study, which examined Amazon, Facebook, Google, Netflix, Apple, and Microsoft, alleges that these companies have shifted revenue and profits through tax havens and low-tax jurisdictions, while also delaying payment of taxes they do incur.
According to the report, Amazon paid just $3.4 billion (£2.6 billion) in income tax on revenues of $960.5 billion and profits of $26.8 billion from 2010 to 2019. This equates to an effective tax rate of 12.7%, significantly below the US headline rate of 35% for most of that period. The company’s UK subsidiaries – Amazon UK Services and Amazon Web Services UK – had combined tax bills of only £83 million over the decade, with the bulk of sales booked through Luxembourg.
Amazon disputed the findings, stating that its effective tax rate on profits from 2010-2018 was 24% and that its low profit margins naturally result in a lower cash tax rate. The company added that it pays all taxes due and invests heavily in jobs and infrastructure. However, the Fair Tax Mark argued that Amazon’s accounting is so complex that there is “no way to discern” how much tax it should be paying in the UK.
Paul Monaghan, chief executive of the Fair Tax Mark, said the analysis revealed a significant gap between cash taxes paid and both the headline rate and reported current tax provisions. He concluded that corporation tax paid by these firms is “much lower than is commonly understood.” The report also highlighted that Facebook paid just $7.7 billion in income taxes on profits of $75.5 billion, an effective rate of 10.2%.
The findings come amid ongoing debates over international tax reform. Progress was recently hampered when 12 small EU countries, including Ireland, blocked a proposed rule to force multinationals to disclose profits and taxes paid in each member state. All the companies named in the report have denied any wrongdoing and defended their tax practices.
