Amazon has raised a total of £ 425 million in UK government contracts over the past two years, the report said, sparking further criticism that the tech giant is not paying a fair share of taxes in the country.
The report, prepared by the Center for International Corporate Tax Reporting and Research (CICTAR) with the help of the research think tank Taxwatch, finds that Amazon’s highly profitable cloud computing business is increasingly indirectly supported by taxpayers through hundreds of billions of dollars in government contracts. worldwide.
In the UK, Amazon has benefited from £ 250 million in government contracts in 2020 – from zero in 2014 and less than £ 25 million over the next four years, according to CICTAR. This was more than 10 times the level of corporate tax paid by the group’s main British subsidiaries in the same year.
Amazon’s publicly published corporate tax bill in the UK – for its largest subsidiary Amazon UK Services, as well as for Amazon Digital UK and Amazon Online UK – totaled £ 22.3 million in 2020.
In 2021, another £ 175 million in government contracts were reserved. Data on last year’s corporate tax are not yet available.
George Turner, CEO of Taxwatch, said: “Amazon’s history of tax evasion is very well known, but the company has managed to achieve a huge increase in revenue from the work it does for the government.
“At the very least, taxpayers will want some reassurance that their money is being spent on companies that are transparent about their tax affairs and demonstrate that they do not use artificial structures to reduce their tax bills.
“The Queen’s last speech announced a new bill to reform public procurement. This seems to me the perfect opportunity for the government to ensure that those who receive lucrative government contracts also contribute to the tax system. “
In the United Kingdom, the Amazon Web Services (AWS) division of the Seattle-based company provides services to the Home Office, HMRC and the Department of Defense. The contracts include cloud computing services for MI6, MI5 and the Ministry of Defense, including the storage of sensitive documents, according to the report.
The report said: “While the UK government has taken some measures to tax profits generated in the UK but registered offshore, there is no evidence that these measures have been effective.
Amazon said the calculations were misleading and did not include most of our business. Comparing the value of a contract for many years with an incorrect corporate tax figure for one year is very misleading. “
An Amazon spokesman said: “We are investing heavily in job creation and infrastructure in the UK – more than £ 32 billion since 2010. This continued investment has contributed to a total tax contribution of £ 1.55 billion in 2020. – £ 492 million in direct taxes and £ 1.06 billion in indirect taxes.
£ 492 million in ‘direct taxes’ – up from £ 293 million a year earlier – includes national employer insurance, business rates and stamp duty, as well as corporate tax.
The company added that the UK government services using AWS “enjoy cost savings of up to 60%”. A spokesman said: “UK public sector organizations are using the UK branch of AWS Europe, which registers sales in the UK and pays all applicable taxes due on its profits directly to HMRC.
A spokesman for the UK government said: “Amazon Web Services is just one of many government cloud service providers and our procurement decisions are always based on getting value for taxpayers and the best quality of service.
In Australia, Amazon’s AWS division has won contracts worth A $ 626 million (£ 498 million) since 2013, according to the study.
This includes a deal with the Digital Transformation Agency, which should lead to improvements in federal government technology, under which Amazon will receive 560 million Australian dollars between 2019 and 2025, as well as arrangements with the IRS and a government management contract. to track Covid-19, which is considered unsuccessful because few people use it.
In the United States, the report said it had recently reported that Amazon had signed a $ 10 billion (£ 8 billion) deal with the National Security Agency. The company set aside just over $ 2 billion for federal taxes in the United States last year, according to the company’s annual report, but kept its effective tax rate low at $ 1 billion in tax credits and other relief.
Amazon said US taxes “reflect our commitment to invest in innovation, our employees and our communities.”
The findings come ahead of Amazon’s annual shareholders’ meeting on Wednesday, where the technology group faces pressure from shareholders to be more transparent about its tax affairs. Investors will also vote on a shareholder proposal calling for an independent report on working conditions in its warehouses, a move backed by the Glass Lewis shareholder consultation group.
The Greater Manchester Pension Fund and the Oblate International Pastoral Investment Trust, backed by the UK-based independent shareholder consulting firm Pirc, unveiled a tax transparency resolution that was publicly backed by institutional shareholders, including Norges Bank.
Amazon has urged shareholders to vote against the proposal, Amazon said it has already publicly reported its tax contribution in some countries, including the UK, in its recommendation document before the general meeting.
It says that more “detailed” tax reporting, as planned under the new EU rules, would “potentially force the disclosure of sensitive competitiveness information for our operations and cost structures” and hamper our ability to take operational decisions “.
Tom Paudril, Pirc’s chief executive, said: “There is a real risk of changes in tax regulations and broader public policy, catching companies and their investors, so transparency is vital. President Biden said Amazon did not pay federal corporate tax in the United States in 2020. [to shareholders] does not disclose income, profits or tax payments in markets outside the United States and does not respond to prior shareholder engagement. “
Michael Wirsch, chief investment officer of the Australian pension fund Vision Super, which takes care of about 12 billion Australian dollars in pension savings, said the fund will vote in favor of the resolution.
“Companies don’t work in isolation from communities and societies, and if you don’t pay any taxes, you end up with nothing – you don’t have a society,” he said.
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He said Vision was also concerned about the high remuneration of the company’s executives, which was partly based on profits.
“All this information is available to the tax authorities, we need to be able to see what they are doing. We need to be able to judge, appreciate how well they do their job. “
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