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Amazon among firms to face tougher taxes in Europe

18 September 2017 - 11:34 by Simon Crisp

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Online shopping giant Amazon has faced repeated criticism over the years as a result of the comparatively small amounts of tax it pays in the European countries where it operates its vastly successful business. Now regulators could clamp down on avoidance tactics by taxing revenues as opposed to the profits that it and other similarly large corporations report each year.

Government representatives from Italy, Spain, France and Germany all signed a letter in which they said that the current state of affairs was unacceptable and that a change was necessary, meaning Amazon, Google, Apple and a host of other major US tech firms could have to pay much more, according to the Register.

This so-called ‘equalisation tax’ would look at the amount of money that big companies pull in, rather than simply the amount of profit generated. The idea is to make sure that they are paying similar sums to other multinationals in other industries.

For this proposal to be set down in law, there would need to be total support from every nation in the EU, which may prove to be an insurmountable hurdle. A small number of EU member states, including Ireland, play host to digital firms of this size by keeping taxes low and helping them avoid having to pay elsewhere.

Although Amazon sells billions and billions of pounds worth of products via safe shopping online to consumers across the UK and Europe, it paid only £7.4 million in corporation tax last year, according to the Guardian. This is half the amount it paid in the year before and an indication that its habits are not changing.

Some consumers choose to carry out shopping online with Amazon’s rivals specifically because of these issues with tax, but now that regulatory pressure is coming into play these big companies may be forced to take notice.