Good news for those who loathed Amazon’s abhorrent UK tax policies but hypocritically shopped with them anyway because of their unbeatable prices (i.e. all of us), as the online retailer is now set to pay corporation tax in the UK after previously recording its earning in Luxembourg.
The move makes Amazon the first technology company to halt the divisive tax schemes employed by many major corporations, which have enabled profits made in the UK to be diverted to other regions in order for companies to pay less tax. Amazon will now register its earnings with the HMRC, meaning that it will no longer avoid UK tax payments.
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A spokesperson for Amazon said: “[Amazon is] now recording retail sales made to customers in the UK through the UK branch. Previously, these sales were recorded in Luxembourg”.
‘Google Tax’ will see companies routing their UK taxes overseas being hit with a 25% tax on their profits.
Amazon’s move away from the tax avoidance scheme comes after chancellor George Osborne introduced a new diverted profits tax (popularly known as the ‘Google Tax’ due to the search engine corporation also failing to pay its UK taxes), which will see companies routing their profits overseas being given a 25% tax fee if they wish to continue doing business in the UK. Osborne has said that he hopes the new measures will generated an extra $3.1 billion over the course of the next five years.
Though Amazon insists that it it was not paying its taxes overseas in order to minimise its costs, the company’s 2013 UK accounts registered just £449 million of sales for a tax charge of £4.2 million, whereas a separate corporate account for the same time period attributed £4.71 billion of its sales to the UK.
Google was branded “devious” and “unethical” in court for its refusal to pay UK taxes, while Facebook has now avoided UK corporation tax for a second year after filing its accounts in Ireland.
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