Amazon hints at move to pay UK tax

UK, German, Spanish and Italian sales to be recorded in each country

Amazon has begun recording UK deals locally instead of through its Luxembourg branch where it has negotiated a low-tax agreement.

The move, announced today, suggests it has bowed to pressure over its controversial tax practices.

In a statement released today, Amazon said on 1 May it started recording retail sales made in the UK, Germany, Spain and Italy in those specific countries. Before that, those sales were recorded in Luxembourg. The company said it is looking to do something similar in France.

Amazon has been heavily criticised by consumers and business customers alike over its methods of paying tax. Earlier this month, politician Margaret Hodge called on customers to boycott the retail and tech giant over its tax practices, labelling it an "outrage", according to the Guardian.

Last October, the EU launched an "in-depth investigation" into Amazon's tax deal in Luxembourg.

At the time, European Commission vice president in charge of competition policy Joaquín Almunia said: "National authorities must not allow selected companies to understate their taxable profits by using favourable calculation methods. It is only fair that subsidiaries of multinational companies pay their share of taxes and do not receive preferential treatment which could amount to hidden subsidies."

In a statement released today, Amazon said:

"We regularly review our business structure to ensure that we are able to best serve our customers and provide additional product and services. More than two years ago we began the process of establishing local country branches of Amazon EU Sarl, our primary retail operating company in Europe.

"As of 1 May, Amazon EU Sarl is recording retail sales made to customers through these branches in the UK, Germany, Spain and Italy. Previously, these retail sales were recorded in Luxembourg. We are working on opening a branch for France."