In the US, Amazon famously doesn't charge sales tax in states that it doesn't have physical operations in, but similar practices abroad may have drawn the investigative eye of UK tax authorities. The Guardian reports that recent filings with the US Security and Exchange Commission reveal that the company's UK arm generated £3.3 billion in sales last year, but that it paid no corporate taxes on the profits for said sales. Amazon managed the trick by transferring ownership of the UK business to Amazon EU Sarl, an entity based in Luxembourg, back in 2006. The physical UK operation itself is classified as a delivery and order-fulfillment business only, with all sales and transactions happening between consumers and the Luxembourg-based entity.
The filing also reportedly reveals that the company is being investigated by tax authorities in the UK. While The Guardian wasn't able to confirm the investigation with HM Revenue & Customs — much less whether the inquiry is directly related to Amazon's UK sales tax practices — it would be just yet another example of the company's policies drawing ire from state and federal governments. The lack of sales tax is obviously a boon for consumers looking for a bargain, but with Amazon already voicing support for some version of an online tax, we imagine we'll be seeing one sooner rather than later.