Amazon has been a target of European regulators for its tax arrangements, and the company is subject to tax at all of its European branches.
Amazon.com Inc.’s main European retail business posted losses of 1.16 billion euros ($1.26 billion) in 2021, allowing the company to avoid paying income taxes and receive 1 billion euros in tax credits, according to show corporate documents seen by Bloomberg.
The Luxembourg-based company posted sales of €51.3 billion last year, up 17% from €43.8 billion in 2020. The unit, called Amazon EU Sarl, includes revenue generated from its e-commerce activities in the UK, Germany, France and Italy. , Spain, Poland, Sweden and the Netherlands.
Amazon has been a target of European regulators for its tax arrangements. The Seattle-based company won an appeal over a 250 million euro ($280 million) tax bill imposed after regulators said deals with Luxembourg dating from 2003 amounted to illegal state aid. Last year, the European Commission appealed to the European Court of Justice.
An Amazon spokesman said the company is taxable at all of its European locations, with revenue, profits and taxes recorded and reported directly to local tax authorities in those countries.
The presentations provide a rare regional breakdown of Amazon’s finances. During 2021, the group recorded global revenues of US$33.36 billion, compared to US$21.3 billion the previous year. However, the company does not break out e-commerce revenue and sales across all countries in its financial reports.
“Across Europe, we pay corporate taxes amounting to hundreds of millions of euros,” an Amazon spokesman said. In the documents, a note states that the net tax benefit of 1,000 million is due “mainly to the use of net losses carried forward in accordance with the fiscal consolidation system.”
Since 2013, European Commission state aid investigators have tried to uncover what they consider to be the most problematic examples of legal individual tax agreements, or tax rulings, doled out to companies.
Amazon’s Luxembourg-based company had 6,899 employees at the end of last year, according to the document. The unit recorded €37bn of “raw materials and consumables” and €15bn of “external charges”, resulting in the annual loss.
“We are investing heavily in creating jobs and infrastructure across Europe – more than €100 billion since 2010,” an Amazon representative said. “Corporate tax is based on profits, not income, and last year Amazon EU Sarl made a loss when we opened more than 50 new sites across Europe and created more than 65,000 good-paying jobs, raising our total permanent European workforce to more than 200,000,” the spokesperson added.
Amazon has been a target of European regulators for its tax arrangements, and the company is subject to tax at all of its European branches.
