Johnson to raise Amazon's tax record when he meets Bezos today, report
Amazon is accused of evading taxes by declaring a major part of its revenues in low-tax Luxembourg
Prime Minister Boris Johnson has committed to challenge Amazon founder and executive chairman Jeff Bezos on his company's tax record when the duo meet in person on Monday during Johnson's three-day trip to New York and Washington.
An official government spokesperson told The Guardian that concerns surrounding global corporate tax rates for technology giants would be high on the agenda during prime minister's meeting with the Amazon founder.
"As you know, we've been a leading advocate for an international solution to the tax challenges posed by the digitalisation of the economy," the spokesperson said.
"We secured an agreement at the G7 on digital tax, so we'll very much be looking to raise that."
The e-commerce firm's revenues in the UK soared by more than 50 per cent to £20.63 billion last year, according to The Guardian, although its UK division paid just £18.3 million in direct taxes.
Last month, a new analysis by trade union Unite found that Amazon reported up to £8.2 billion of its UK sales in Luxembourg in 2019, to avoid paying the higher rates in the UK. The report claimed that the retail giant declared £13.7 billion of UK sales in its US accounts in 2019, but reported just £5.5 billion in sales in filings for its UK-based firms.
The researchers examined accounts for 19 of Amazon's UK-registered companies, including its warehouses, logistics operation and the Internet Movie Database (IMDb). They estimated that the company paid a maximum of £84 million on its profits in UK tax - about £46 million less than would have been expected.
Amazon is able to shift revenues out of the country where they were made through its subsidiaries - an option not available to smaller firms. The Unite union argues that this gives large firms, especially those in the tech sector, an unfair advantage.
In June, a report by Fair Tax Foundation named Amazon and Facebook as the worst offenders in tax avoidance. The researchers claimed that Amazon paid $5.9 billion in taxes between 2011 and 2020, on reported profit of $60.5 billion and revenues of $1.6 trillion. Based on international tax rates, the company should have paid $10.7 billion in taxes over that period.
Also in June, G7 leaders signed a historic deal aimed at getting multinational firms to pay more tax.
The agreement, the first stage of setting a global minimum corporate tax rate of 15 per cent on multinational firms, would ensure that big tech companies, specifically digital platforms, pay taxes in the countries where they operate and not only where they have headquarters.
On Monday, Johnson is also expected to ask Bezos to address working standards for employees in the UK.
He will also congratulate Bezos "on his massive forestry initiative".
"He's putting a huge amount into planting trees around the world," Boris Johnson told reporters on the way to the US, according to Bloomberg.
The prime minister's official spokesman said "Amazon has a role in addressing the issues of climate change and biodiversity" and "that's very much the issues that the prime minister intends to raise with Mr Bezos".
Bezos says his latest efforts at space exploration are part of the solution for the climate crisis.
He told the US broadcaster MSNBC in July that humans need to move "all heavy industry, all polluting industry" into space and "keep Earth as this beautiful gem of a planet that it is".