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Amazon told to pay £160m as US giants accused of avoiding UK tax

Amazon: 'Unfair competition'. Picture: Getty

Amazon: 'Unfair competition'. Picture: Getty

Amazon, the multinational internet retailer, has been hit with a $252 million (£160m) demand for unpaid taxes by French authorities, the company revealed yesterday.

The bill, for interest and penalties in relation to “the allocation of income between foreign jurisdictions” comes as European countries step up efforts to clamp down on US companies that minimise their tax bills by channelling profits through low-tax regimes.

Amazon said it would fight the tax claim, which related 
to the calendar years 2006 to 2010.

“We disagree with the proposed assessment and intend to vigorously contest it,” the company said.

The admission came as 
company officials from Amazon, Starbucks and Google appeared before MPs yesterday as part of a wider inquiry into tax avoidance.

Starbucks chief Troy Alstead was told his claims that the coffee chain continually made a loss in Britain “just doesn’t ring true”.

Mr Alstead, global chief financial officer at the company, denied lying to shareholders over the chain’s accounts when he appeared before MPs investigating the taxation paid by multinational companies.

The US chain is reported to have paid nothing in corporation tax to the UK over the past three years and has filed losses with Companies House for most of the years it has been operating in the UK.

Margaret Hodge, who chairs the public accounts committee, questioned how that could happen when statements the committee had seen showed a former chief financial 
operator saying in 2007 
that the division had an operating profit rate of 15 per cent.

Mr Alstead denied knowledge of the statements and 
insisted that the first profit 
Starbucks made was £6 million in 2006.

Mrs Hodge questioned why the company had filed millions in losses and then promoted the head of the UK business, Cliff Burrows, to take over the US 
operation.

She said it did not “ring true” that the man in charge of an operation that was running such an unsuccessful division would be promoted.

Mrs Hodge told the coffee chain boss: “You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn’t ring true.

“You are losing money. You have tried for 15 years and failed and you have promoted the guy who failed.

“It doesn’t ring true, Mr Alstead – that’s what frustrates taxpayers in the UK.”

She added: “Are you lying to your shareholders?”

Mr Alstead replied: “Absolutely not.

“We are not at all pleased about our financial performance here. It is fundamentally true, everything we are saying and everything we have said historically.”

The public accounts committee also questioned Matt Brittin, chief executive officer of Google UK, and Andrew Cecil, public policy director at Amazon, in the wake of a wave of revelations about the tax affairs of international companies.

 

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