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A worker puts together orders at the Amazon logistics center in Brieselang.
Reuters/Hannibal
Bowing under pressure?
PRIME SUSPECT

Amazon has quietly changed the way it pays tax in Europe

Cassie Werber
By Cassie Werber

Reporter

Europeans have become increasingly unhappy about how multinationals—especially tech companies—take advantage of the EU’s structure to pay minimal taxes. The European single market allows them to pick the most friendly tax regime and channel revenue through it, rather than declaring it in the countries where it was earned. But that might be changing.

Amazon has told the Wall Street Journal (paywall) that as of May 1st, it is now recording the income it gains from sales on a country-by-country basis. Previously it booked its revenue and paid most of its tax via a subsidiary in Luxembourg. The European Commission began an investigation (pdf) last year into whether the tiny country’s dealings with Amazon amounted to state aid.

The changes mean that UK, Germany, Spain and Italy will gain their share of the billions in revenue that the company generates from shoppers in those countries, according to the Journal, which does not mention other countries. Amazon UK has not yet answered requests for comment from Quartz.

Tax avoidance has become a sore point with the electorate in many countries, including France and the Britain. It was a major issue at the most recent UK election, and all the main parties promised to crack down on both corporations and individuals diverting money into offshore accounts and places with more lenient tax regimes. France has opened investigations into several companies, including Google, for their tax behavior.

Starbucks, Facebook and Apple have also been subject to criticism for they way they handle taxation in Europe.

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