Amazon will not have to pay the UK government's new digital services tax on products it sells directly to customers while smaller businesses are being hit with increasing levies if they sell goods using their platforms, according to a report by The Times.
The tax is part of a British initiative to make Big Tech companies such as Google, Amazon and Facebook pay more taxes in the UK, a scheme which is estimated to eventually bring in around £500 million (€550 million) for the treasury.
Both Amazon and Google have admitted that the 2% tax on revenues made in the UK will be passed onto advertisers and sellers who use their platforms.
Alongside the UK, the EU is also starting to clamp down on Big Tech in an effort to curb down their market power which stifles competition.
The new EU bill is specifically designed to target US companies such as those based in Silicon Valley, with the hope of rapidly decentralising or breaking up the bigger corporations.
According to The Guardian, Amazon only paid £14.4 million (€15.8 million) in corporate tax compared with a UK turnover of roughly £13.7 billion (€15 billion).
Google UK reported £1.6 billion (€1.76 billion) in revenue last year, while similarly paying a minuscule £44 million (€48.4 million) in corporate taxes.
The report is based on data that comes directly from Her Majesty's Revenue and Customs (HMRC) - the UK's tax office.
Back in June UK chancellor Rishi Sunak admitted the coronavirus pandemic had made tech giants "even more powerful and more profitable" and they needed to "pay their fair share of tax."
The tax is not applied to sales, which could penalise a number of retailers who hardly fall under the umbrella term of "Big Tech," such as supermarkets or clothes retailers, but on the service fees that company's such as Amazon and Google charge third parties who use their platform.
As previously stated, Amazon recently added a 2% levy on third parties that use their platform, which effectively gives them a price advantage on competing goods it sells to consumers.
This levy is being used by the company to effectively ignore the new tax, by not letting it dig into their profits, and putting the burden of paying it on third-parties.
This also means smaller businesses, who rely on companies such as Google and Amazon, to list and distribute their goods and services, will be paying increased costs to make up for potential losses the tech giants may face.
In addition, Google also announced last month its intention to charge 2% more for advertisers who list ads served on both Google and YouTube as a way of dealing with the UK's new tax, which is set to add £120 million annually to marketers' costs.
In a statement, a spokesperson for Amazon said: “Like many others, we have encouraged the government to pursue a global agreement on the taxation of the digital economy at OECD level rather than unilateral taxes, so that rules would be consistent across countries and clearer and fairer for businesses.”
Amazon founder Jeff Bezos' fortune skyrocketed above $200 million as a quarantined population resulted in a spike in Amazon traffic throughout the pandemic.
Furthermore, the combined wealth of the ultra-rich was recently reported to have risen to a staggering $10.2 trillion, as they were said to have done "extremely well" during the pandemic.
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