Quote:
Originally Posted by Rizla
That's less than 1%, and they earned £200m  How is that defensible? |
£200m figure is revenue, not profit. You need the profit figures, or their profit margin, to see if paying 1% of revenue is reasonable.
This article gives the figures you need.
In Amazons' year ending in 2011, they have revenue through their UK site of £2.9 billion. But in their accounts, only £0.207 billion of that was actually to Amazon UK. The rest was through Amazon EU Sarl, paying Amazon UK for warehousing. They paid corporation tax of £1.8 million from that £207 million in revenue. Corporation tax in the UK in
2011 was 26%, so that implies a profit of £7 million on that £206 milllion, or about 3.5%, about the same as the US corporation.
3.5% of £2.9 billion is about £100 million, and 26% of that is, of course £26 million.
So by accounting for most of their UK sales through Amazon EU Sarl, Amazon avoids about £24 million in UK corporation tax. I'm uncertain as to how much of that was paid as corporation tax in Luxembourg.