Amazon – Public money but no public scrutiny
The Centre for International Corporate Tax Accountability and Research (CICTAR) has today published its latest report looking at Amazon,Amazon Tax Report, CICTAR, 24 May 2022, www.cictar.org/Amazon-Tax revealing the growth and scale of Amazon’s government contracts, and calling on governments around the world to require more transparency in Amazon’s tax affairs. TaxWatch was pleased to have the opportunity to assist CICTAR in the production of its report.
The report focuses on Amazon Web Services (AWS), the company’s fast-growing unit which has become by far the largest cloud infrastructure service provider, controlling more than a third of the world’s market. While AWS only accounts for 13% of Amazon’s total revenues, it makes up 74% of the company’s operating profit.
Over the last five years, AWS has grown exponentially, partly fuelled by government contracts. In the UK, AWS won almost £600m in government contracts between 2018 and 2021, a number that is likely to rise in the coming years.
Given Amazon’s significant and ongoing controversies over its international tax structure, the report questions whether governments should use their leverage to force a greater level of transparency over where the company pays its taxes. A timely issue given the recent publication of the Procurement Bill, which seeks to reform government contracting in the UK.
Amazon’s tax transparency has also become a question facing investors, who are set to vote on a proposal calling on the company to implement the Global Reporting Initiative (GRI) Tax Standard.Notice of 2022 Annual Meeting of Shareholders & Proxy Statement, Amazon, https://s2.q4cdn.com/299287126/files/doc_financials/2022/ar/Amazon-2022-Proxy-Statement.pdf The proposal was filed by the Greater Manchester Pension Fund (GMPF) – the UK’s largest local government pension fund – and the Oblate International Pastoral Investment Trust, in December of last year.CICTAR and PIRC engage with global investors to support responsible tax practices, CICTAR, 10 February 2022, … Continue reading
Amazon does not provide a breakdown in its accounts of revenues, profits, and tax payments in non-US markets, making it difficult for investors, the public, and tax authorities around the world, to evaluate whether Amazon is engaged in responsible tax practices. The implementation of the GRI would allow for necessary scrutiny.
The resolution is the first of its kind to be filed in the United States and will go to a vote at Amazon’s annual shareholder meeting on 25 May. Unsurprisingly, Amazon’s board of directors is recommending shareholders vote against this proposal, with one reason being given that the GRI “would potentially force disclosure of competitively sensitive information about our operations and cost structures and would hamper our ability to make operational decisions.”Notice of 2022 Annual Meeting of Shareholders & Proxy Statement, Amazon, https://s2.q4cdn.com/299287126/files/doc_financials/2022/ar/Amazon-2022-Proxy-Statement.pdf
|↑1||Amazon Tax Report, CICTAR, 24 May 2022, www.cictar.org/Amazon-Tax|
|↑2, ↑4||Notice of 2022 Annual Meeting of Shareholders & Proxy Statement, Amazon, https://s2.q4cdn.com/299287126/files/doc_financials/2022/ar/Amazon-2022-Proxy-Statement.pdf|
|↑3||CICTAR and PIRC engage with global investors to support responsible tax practices, CICTAR, 10 February 2022, https://cictar.org/news-roundup-cictar-and-pirc-engage-with-global-investors-to-support-responsible-tax-practices/|