Report on HMRC's 2011-2012 Accounts - written evidence

Written evidence from Amazon EU SarL

Thank you for giving me the opportunity to appear before your Committee yesterday. I would like to provide the additional details you and the Committee requested about Amazon’s EU structure and UK sales.

Amazon’s European corporate structure is as follows:

· The rights to intellectual property used to operate Amazon’s EU websites are held by Amazon Europe Holding Technologies SCS, a Luxembourg company. Amazon Europe Holding Technologies SCS is owned by Amazon.com Int’l Sales, Inc., Amazon.com, Inc., and Amazon Europe Holding, Inc., all of which are U.S. companies. This is how EU entities pay for the use of Amazon’s technology and intellectual property, which is primarily developed in the U.S.

· Amazon’s EU ecommerce retail businesses on all of our EU websites, including on www.amazon.co.uk, are operated by Amazon EU Sarl, a Luxembourg company owned by Amazon Europe Holding Technologies SCS. Amazon EU Sarl owns the inventory, earns the profits associated with the selling these products to end customers and bears the risk of any loss. From Luxembourg, Amazon EU Sarl processes and settles payments from its European customers.

· Amazon’s EU third party seller (i.e., marketplace) business, which supports sellers that sell on www.amazon.co.uk , is operated by Amazon Services Europe Sarl, a Luxembourg company owned by Amazon EU Sarl.  Our marketplace service allows small businesses and sellers to make their goods available through our Amazon’s EU websites.  In addition, these businesses and sellers can choose to send us their inventory in one country, which we store at our fulfilment centres, list on all our websites across Europe, and pick, pack and deliver anywhere in Europe.  From Luxembourg, Amazon Services Europe Sarl processes and settles payments from its European customers.

· Amazon’s EU digital business (in which MP3s and eBooks are sold) is operated by Amazon Media EU Sarl and is owned by Amazon EU Sarl. Amazon Media EU Sarl earns the profits associated with the selling of digital products to end customers and bears the risk of any losses. From Luxembourg, Amazon Media EU Sarl processes and settles payments from its European customers.

· Fulfilment and customer service centres located in the UK are operated by Amazon.co.uk Ltd, a UK company. Amazon.co.uk Ltd earns a margin on its operating costs for providing services performed in the UK to group companies, primarily to Amazon EU Sarl. The services provided include fulfilment and logistics services; customer support services; accountancy, tax, legal, human resources, localisation and similar back office services; merchandising and marketing support services; and purchasing assistance.

Although we have not publicly disclosed net sales generated from specific websites targeting EU countries or elsewhere, in response to the Committee’s request, we would like to share with you on a confidential basis net sales generated from the amazon.co.uk website over the past three years. These sales are set forth in the table, below, along with the amount of VAT collected by Amazon EU Sarl on behalf of the UK government.

(in millions)

2009

2010

2011

Net Sales: www.amazon.co.uk

£1,865

£2,360

£2,910

UK VAT Collected: Amazon EU Sarl

£172

£262

£416

.

Andrew Cecil

Director, EU Public Policy

13 November 2012

Prepared 23rd November 2012