UK media reports are quoting statements by Christopher North, head of Amazon UK, that the online bookselling giant still may not pay more corporation tax on its British sales. This is despite Amazon UK’s change of policy to book its sales through the UK rather than in Luxembourg, in response to UK government pressure on such tax breaks.
The issue is simply that Amazon UK may not book much of a profit on sales this year. North outlined how cost of expansion and rollout of new services may eat up any revenue gain and lead to a far lower paper profit, or even a loss. And Amazon has proverbially pursued a policy of keeping its profits low to fund further growth and development. None of which seems to have hurt its stock with investors.
The Scottish Daily Record described North’s comments as a “brazen boast,” and included his remark that Amazon UK might actually pay less tax in its headline. But there doesn’t seem to be much that the UK authorities can do to redress the situation – without compelling Amazon to grow more slowly in the UK, or offer less services to its customers.