Amazon To Start Paying Full Tax In Europe: Oz Next?
It has already begun booking sales made to customers in Britain through the UK branch, rather than Luxembourg, and says it will extend the practice to other European countries.
As in Australia, a number of European countries, including the UK, Germany and France, have criticised the tax strategies of some American tech companies, including Google, which have been using complex structures that sharply reduce the amount of tax they pay in individual European countries.
The European Commission, executive arm of the European Union, is also investigating whether Apple and Amazon receive unfair state support through low-tax agreements in Ireland and Luxembourg, respectively, where the companies run their European operations.
Amazon reported a 14 percent rise in European revenue, to 13.6 billion euros, (A$17.37 billion), in 2013, according to latest company filings.
In Britain, George Osborne, the country’s finance minister, has set up a so-called Google tax that imposes a 25 percent tax on the local profits of international companies that are perceived to route money unfairly overseas. The new policy came into effect last month.
In Australia, Treasurer Joe Hockey this month announced plans to introduce a Multinational Anti-Avoidance Law targeting some 30 multinational companies he claims have diverted profits earned in Australia to no- or low-tax jurisdictions. He hasn’t named the companies.