America’s senior financial regulator has increased pressure on Amazon to be more open over its global tax affairs by rejecting the technology group’s move to block a shareholder vote on greater transparency.
The ecommerce powerhouse was accused of being “out of step” with investors and regulators after seeking to quash a campaign for it to share more information about where and how it pays taxes.
The US Securities and Exchange Commission sided with shareholders pushing for a vote on detailed disclosures, denying Amazon’s request for permission to exclude the motion from its annual meeting.
It is only the second time that the authority has backed a shareholder proposal on tax after a challenge by a company. In a letter to Amazon’s lawyers, the agency said that it was “unable to concur” with their conclusion that the business could stop the vote.
Amazon, the world’s largest retailer by market value, is a $1.6 trillion business founded by Jeff Bezos in 1994. It has long faced questions over its tax affairs. It paid $2.3 billion in federal income tax in the United States last year, but does not provide the same level of information in other countries. It paid £492 million in taxes in Britain in 2020, equivalent to about 2.3 per cent of the £20.63 billion revenue that it generated in the country.
The US watchdog’s ruling is a victory for investors including the Greater Manchester Pension Fund that have called on Amazon to publish a detailed breakdown of finances country-by-country, setting out its international tax practices. This would bring it in line with the Global Reporting Initiative’s new standard on taxation.
Amazon argued that it could exclude the proposal on the ground s that tax related to its “ordinary business” operations. The company already provides “extensive and detailed” information on tax in the US, its lawyers noted, and has reported total payments in Italy, France, Spain and Britain.
However, the regulator denied…
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