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Labour to strip Amazon of public sector contracts if they fail to pay fair share of tax, John McDonnell says



Labour would look to axe government contracts with Amazon and other companies if they were found to have avoided paying their fair share of tax, shadow chancellor John McDonnell has said.

“What they [Amazon] have done is use every device not to pay their way,” Mr McDonnell told the Mirror.

Asked if Labour would end Amazon’s existing contracts with the public sector, he said: “We would have to look at the legislation.

“We would do ­whatever it takes to make sure that companies like Amazon pay their fair share of tax.”

Amazon won 40 public sector contracts worth around £460m between the start of 2015 and June this year, according to government procurement consultants Trussell.

The e-commerce giant revealed earlier this month that one of its largest UK subsidiaries paid just £1m in corporation tax on profits of £75.4m last year.

Amazon UK Services, which handles the group’s warehouses, deliveries and customer services, saw revenues rise to £2.3bn from £2bn a year earlier.

Multinational tech firms are coming under ever-increasing scrutiny over their tax arrangements.

Apple is set to launch a legal challenge this week to a record €13bn bill for back taxes imposed by the EU Competition Commission over the iPhone maker’s deal with Ireland.

Google last week agreed to pay a total of around €1bn to the French government in back taxes and fines to settle a long-running case.

In July, French lawmakers approved a 3 per cent tax on the revenues of large technology companies made in France.

The Organisation for Economic Coordination and Development (OECD) is working on its own international agreement to ensure that tech firms are subject to 

A senior EU official said on Monday that the trading bloc would move ahead with its own tax on digital services if a global agreement could not be reached.

“My first task will be to see whether it is possible to introduce a web tax at the OECD/G20 level, that is to say at a global level, because that would be the most effective solution,” Commissioner-designate for Economic Affairs Paolo Gentiloni told Italian newspaper La Stampa in an interview.

“The Commission will seek to reach an accord by 2020 but if that’s not possible my mission will be to propose a European web tax … we’re not prepared to wait,” he added.

An Amazon spokesperson said: “Amazon pays all the taxes required in every country where we operate.

“Corporate tax is based on profits, not revenues, and our profits have remained low given our heavy investments. Retail is a highly competitive business.”



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