In Depth

Tax row: 'pathetic' Amazon man humiliated by MPs

Google and Starbucks also grilled over low tax payments, but Amazon is ordered to send a more knowledgeable exec

amazon-cecil.jpg

AN AMAZON executive was humiliated by MPs yesterday as he and senior employees of fellow multinationals Starbucks and Google faced questioning about the low rates of corporation tax paid by their British arms.

But while Starbucks and Google merely irritated MPs on the Public Accounts Committee, commentators agreed that Amazon's Brussels-based director of public policy Andrew Cecil was the big loser.

Cecil was accused of being "totally evasive" over questions relating to the value of Amazon's sales in the UK, the pre-tax profits of the European company and its ownership structure.

MPs slammed a "ridiculous answer" and called him "pathetic". Committee chairman Margaret Hodge accused Cecil of "pretend ignorance" and said she would "order" Amazon to send another person to provide answers to the committee's questions.

The Guardian's Nils Pratley observes that Cecil's performance should be watched by "anybody who doubts the need for a root-and-branch review of the taxation of multinational companies".

Pratley went on: "Cecil was not merely evasive on Monday, which is par for the course when officials of multinationals are quizzed on tax, he was ignorant at an extraordinary level, unable even to tell the MPs how much tax is paid by Amazon's operation in Luxembourg, the base for its European businesses.

"The watching world will have drawn a simple conclusion: Amazon really does not care how its tax arrangements are perceived by UK customers."

The Financial Times finds it simply "bizarre" that Cecil claims not to know his company's UK revenues while The Guardian's Simon Hoggart called the session "one of the great committee disasters, like watching the Titanic, the Bismarck and the R101 all go down in the same afternoon".

The performance of Starbucks' Troy Alstead particularly tickled Hoggart, who saw him as "an American corporate suit, like someone from Mad Men without the rock-like integrity".

Alstead explained that Starbucks paid almost no tax in the UK because it made no money here. Hoggart observed: "Year after year, the business failed. Yet somehow it survived, and the UK boss was even promoted! What a charity Starbucks is!"

Google's head of northern European sales, Matt Brittin, was the only sacrificial lamb to emerge with any credit – and that was thanks to his straightforward admission that his company is based in Ireland because of its low 12.5 per cent corporation tax rate and its non-US intellectual property is owned in Bermuda, a tax haven. He pointed out that Google's operations are completely legal.

Hodge replied: "We are not accusing you of being illegal, we are accusing you of being immoral."

The Guardian's Charles Arthur tweeted his verdict: "Amazon got kicked. Google leapt about the room like Spiderman, just about avoided the blows".

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