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Image: © Scott Lewis via Flickr

Amazon is earning more money and paying less tax. How did that happen?

Paying employees in shares helps. Oh, and being smart about where you register your business.

Amazon's somehow swung it that they're paying 2.8 million less in tax in 2017 than 2016, despite considerably higher profits.

What it means: Did you know Jeff Bezos, CEO of Amazon, is now richer than Bill Gates? That's how much money Amazon has.

Yet somehow, Amazon UK Services, the branch of the company managing customer services and logistics in the UK, lowered its 2017 tax bill and deferred some of the tax to the following year. That means they paid £1.7 million on £2 billion revenue and £80 million in profits.

This figure is only part of the company's full tax bill in the UK, because their retail sales are directed through a company registered in Luxembourg - but they won't disclose the total sum to the press.

One of the main reasons their tax levels are so low is because the company's now started providing share awards to employees, i.e. giving them part of the company rather than wages - which you don't have to pay tax on. It works out pretty nicely for the employees themselves - entry level associates got an average of £3,000 a year, with senior staff getting considerably more.

The company's spokespeople say they've made billions of pounds of investment into the UK, and are planning to create 2,500 jobs. In other words, they're doing their bit for the country. Just not in tax.

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Reader Comments

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