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UK lawmakers slam Starbucks, Amazon and Google on tax

Updated: 2012-11-13 10:00
( Agencies)

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Members of the committee repeatedly criticised Andrew Cecil, Brussels-based Director of Public Policy for internet retailer Amazon, for failing to answer questions about the group's operations.

Cecil declined several times to tell the committee the level of Amazon's sales in the UK.

"We have not disclosed those figures ever publicly," he said.

However, Amazon's annual reports do disclose this figure. The most recent regulatory filing gave UK revenues as 11-15 percent of total sales in 2011, an amount equal to $5.3 to $7.2 billion.

Amazon did not respond to emails or calls asking for explanations about the discrepancy.

"It's just not acceptable .. It's outrageous," the committee's chairman, Margaret Hodge MP, said of Cecil's inability to answer questions about Amazon's UK sales and corporate structure.

Amazon's main UK unit paid less than 1 million pounds in income tax last year.

Amazon avoids UK taxes by reporting European sales through a Luxembourg-based unit. This structure allowed it to pay a tax rate of 11 percent on foreign profits last year - less than half the average corporate income tax rate in its major markets.

Matt Brittin, Google Vice-President for Sales and Operations, Northern and Central Europe, acknowledged the company did cut its tax bill by channelling profits from European sales through Bermuda but said this was perfectly legal.

Google's filings show it had $4 billion of sales in the UK last year, but despite having a group-wide profit margin of 33 percent, its main UK unit reported a loss in 2011 and 2010.

It had a tax charge of just 3.4 million pounds in 2011.

The search engine provider books European sales via an Irish unit, an arrangement that allowed it to pay taxes at a rate of 3.2 percent on non-US profits last year.

Google is under audit by the French tax authority regarding its structure. The company denied a newspaper report last month that it had received a back tax claim for 1 billion euros.

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