The Scottish Government handed Amazon £4.7million last year despite the firm paying no corporation tax on £38billion of European sales.
The internet giant’s web services division was paid the public money and has also recently signed a 10-year NHS deal worth £15million.
But accounts for Amazon’s Luxembourg unit – the firm through which it sells products to millions of Scottish and other European households – claim a £1billion paper loss and therefore zero tax was paid last year.
Documents released through Freedom of Information show that in 2020-21 the Scottish Government paid £4.7million for the firm’s web services, £45,272 the year before and £2.5million in 2018-19.
The £7.2million total was only for Scottish Government “core” departments and didn’t include other agencies.
The NHS deal, meanwhile, is to provide web hosting for an IT system able to deploy “data in real-time at the point of care” for patients north of the Border.
Labour MSP Paul Sweeney said: “Amazon is the classic example of a global giant in a monopolistic position that allows it to stamp out competitors and use its might to drive down pay and conditions while paying as little tax as possible.
“The company has been handed the opportunity to make billions during the pandemic while traditional shops have been forced to close and yet it still isn’t paying anything like its fair share of tax.
"The Scottish Government needs to urgently consider whether it is doing all it can to crack down on tax avoidance globally. But the truth is that the model for an independent Scotland appears to be one where we would allow this sort of behaviour in the same way Ireland has acted as a tax haven in order to attract inward investment.”
Amazon’s latest corporate filings in Luxembourg revealed the company collected record sales income of £38billion in Europe last year but did not have to pay any corporation tax. Accounts for Amazon EU Sarl show that, despite record income, the Luxembourg unit made a £1billion loss and therefore paid no tax.
In fact, the unit was granted £48million in tax credits to offset any future tax bills should it turn a profit. The Luxembourg firm handles sales for the UK, France, Germany, Italy, the Netherlands, Poland, Spain and Sweden. It employs 5262 staff.
Paul Monaghan, chief executive of the Fair Tax Foundation, said: “These figures are mind-blowing, even for Amazon. We are seeing exponentially accelerated market domination across the globe on the back of income that continues to be largely untaxed.”
An Amazon spokesman insisted that, while no corporation tax had been paid in Luxembourg, tax had been paid in other regions. He added: “Since 2010 we’ve invested more than £23billion in the UK. Earlier this month we announced plans to create 10,000 new jobs in the country by the end of 2021, taking our workforce to over 55,000. This continued investment helped contribute to a total tax contribution of £1.1billion during 2019.”
The Scottish Government said: “We believe all companies should pay their fair share of taxes. However, corporation tax is reserved to the UK Government.
“Public procurement spending is a key driver of economic activity in Scotland and in 2019-20 we spent more than £120million directly with SMEs, with £30million more shared between Scottish sub-contractors.”
