After earning €51 billion from sales in Europe in 2021, Amazon paid €0 in taxes
Amazon posted €51.3 billion in sales across Europe in 2021, which is a record sales figure, after growing by 17% compared to the 2020 figure. However, Amazon’s European subsidiary reported a loss of €1.16 billion in 2021.
The losses led it to save on taxes: it paid nothing, but it did receive €1 billion in tax credits.
The company is based in Luxembourg and posted sales of €51.3 billion last year. The unit, called Amazon EU Sarl, includes revenue generated by its e-commerce activities in the United Kingdom, Germany, France, Italy, Spain, Poland, Sweden and the Netherlands.
Now, you who pay taxes on every single thing you do, you will say, how did it do that? Well, the losses allow the company to avoid paying income tax and get €1 billion in tax refunds. The expenses giving rise to those losses break down as follows: €37 billion in “raw materials and consumables” and €15 billion in “external expenses”, which amounts to an annual loss of €1.16 billion.
Now Amazon says that the 1,000 million tax credits received are due “to the use of net losses carried forward in accordance with the tax consolidation system”. Amazon has said in this regard that “across Europe we pay corporate taxes worth hundreds of millions of euros” but does not specify where.
Since 2013, state aid investigators at the European Commission have been looking for more problematic examples of individual tax deals that have been granted to companies.