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Amazon pressed to be more transparent about tax

Investors hope to take resolution to shareholder meeting

Amazon is under pressure from investors to be more transparent about how and where it pays tax around the world.

A proposed resolution [PDF] seen over the weekend by the Financial Times has called for the megacorp to publish a transparency report according to the guidelines defined by the Global Reporting Initiative (GRI) tax standard.

There are a number of GRI standards aimed at increasing transparency and, in this case, understanding if a company is paying a "fair share" and contributing to society.

Investors trying to take Amazon to task include asset managers Nordea, Royal London and some large European and US pension funds.

It has become increasingly difficult to decipher Amazon's figures and the company's own statements on the matter in the UK tend to include "indirect taxes" such as those paid by employees (for example, PAYE). The geographical spread of the company also does not help matters; AWS UK revenues, for example, are reported as part of Amazon Web Services EMEA SARL.

In its last set of UK profit and loss accounts [PDF], Amazon reported a tax payment of £9.2m (once £9.1m of deferred tax had been applied) on profits of £127.8m for the year ended 31 December 2020. Turnover stood at £4.8bn.

That was an improvement over 2018, when it paid just over £1m to the UK tax authorities.

"Amazon's approach to taxation has been repeatedly challenged by tax authorities globally," said the proposed resolution, noting criticism from US President Joe Biden.

The proposed resolution states that the alleged lack of transparency from Amazon when it comes to breaking down revenues, profits, and tax payments in non-US markets is "challenging investors' ability to evaluate the risks to our company of taxation reforms, or whether Amazon is engaged in responsible tax practices." The data, it reckons, exists "so any increased reporting burden is negligible."

A source familiar with the matter told us the SEC is expected to make a "determination on the proposal the first week of April".

Unsurprisingly, Amazon didn't have much to say on the matter. Although a spokesperson declined to comment, The Register was pointed to a response to the proposal [PDF] filed with the US Securities and Exchange Commission (SEC) earlier this year.

Amazon noted in the filing that: "the Company already provides extensive and detailed disclosure regarding its income tax contributions in accordance with generally accepted accounting principles ("GAAP") in the United States in its publicly filed annual and quarterly reports to the Commission."

"By requesting additional reporting with specific types of disclosures relating to tax as mandated by GRI 207, the Proposal extends into subject matter that would not be appropriate for direct shareholder oversight." ®

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