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Monday, 15 July 2013 10:25

Germans slam Amazon over low tax bill

Written by Nick Farrell



Only three million euros

German lawmakers have slammed the fact that Amazon.com paid income tax of just 3 million euros in 2012 after the group channeled sales to German clients of $8.7 billion via Luxembourg units.

Accounts for Amazon.de showed the company reported profit of just 10 million euros for 2012, which was taxed at the headline German rate of 30 percent. But Germany is Amazon's largest non-U.S. market and represents a third of its overseas sales. What happens is that the vast bulk of that German cash ends up ultimately in Luxembourg-registered Amazon Europe Holding Technologies, which reported profits of 118 million euros but, as a tax-exempt partnership, paid no income tax.

Amazon insists that it follows the tax rules in all the countries where it operates. It is starting to annoy the European union that it appears to be broke and a lot of the reason for that it is that big corporate multinationals are doing their best to exploit tax loopholes.

At a meeting of the G20 group of leading economies in November last year German finance minister Wolfgang Schaeuble teamed up with his British counterpart, George Osborne, to push for changes in international rules that allow companies to shift profits.

It is not clear how long the status quo on tax will remain with lots of EU countries thinking about how to close the loopholes.

Nick Farrell

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