Internet shopping giant Amazon said it has begun booking UK sales in England rather than in a European unit, which may see it pay more taxes.
The firm, which employs 6,000 in the UK, set up a formal UK branch on May 1, adding it will now record sales in England rather than through a unit in Luxembourg, as was previously the case.
Last year the UK arm of Amazon paid corporation tax of less than £10m (€14m) despite generating sales of £4.3bn, according to Companies House filings.
In October, the European Commission said it would launch an investigation to see whether Amazon’s tax affairs comply with state aid rules.
The commission said it would look at a 2003 tax agreement between Luxembourg and the retailer because it said most of Amazon’s European profits are recorded in Luxembourg, but are not fully taxed in the state.
This investigation follows on from other probes the commission has launched into the tax affairs of Apple, coffee, and the financial arm of carmaker Fiat.
It is also looking into whether Ireland and the Netherlands have struck unfair deals with multinational firms to help them cut their tax bills.
Amazon has always said it receives no special tax treatment from Luxembourg and is subject to the same tax laws as other companies operating in the principality.
A spokesman for Amazon said: “As of May 1, Amazon EU is recording retail sales made to customers in the UK through the UK branch. Previously, these retail sales were recorded in Luxembourg. I would not want to speculate on the future, however, corporate tax is based on profits, not revenues.”
In October, Amazon has said it planned to expand its UK workforce by adding 1,000 full-time jobs.
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