Amazon has decided to finally start paying sales tax in individual European countries, amid an investigation into the way the company had previously sent most of its revenue through tax haven Luxembourg.
From May 1st this year, Amazon begun reporting its revenue and paying direct sales tax in the UK, Germany, Italy, and Spain. It's not clear if Amazon will pay tax in other European countries it operates in, such as France, but it's a step in the right direction that will certainly result in a significantly higher tax bill for the company.
Previously, Amazon avoided paying sales tax in European countries by funneling all revenues through Luxembourg under an agreement that sees it pay a miniscule amount of tax in the country. This tax avoidance scheme is similar to ones implemented by Apple, Google and others, which has recently prompted anti-trust investigations by the European Commission.
The European Commission's ongoing investigation into Amazon's tax deals has so far led investigators to believe that the deal gives the company an illegal, unfair advantage over competitors. Amazon may have started paying tax in some European countries as a reponse to these findings, although the company hasn't confirmed this is the case.
It's not just the European Commission that are cracking down on tax avoidance: the governments of several European countries are attempting to curb the practice themselves. The UK, for example, recently introduced a "Google Tax" that punishes companies such as Google, Apple and Facebook when they divert revenue to overseas tax havens.