Amazon now paying tax in Germany and UK

Amazon has reportedly moved to have its local profits taxed within Germany and the United Kingdom from the start of this month.

Online retailer Amazon has started paying tax on profits from its sales to German customers in Germany instead of in Luxembourg.

The change took effect on May 1, Sueddeutsche Zeitung daily quoted the company as saying on Sunday.

Last year, the European Union took to Amazon with a fine tooth comb, scrutinising tax deals between Luxembourg and the online retailer. According to the investigation by the EU, 2014 saw the online retailer bank approximately AU$15 billion from customers in Germany.

Amazon is among several large companies under the spotlight in Europe over tax deals in Luxembourg and elsewhere.

The tax practices of Apple in Ireland, Starbucks in the Netherlands, and Fiat in Luxembourg are expected to be among the next round of multinational names to be placed under the microscope by the EU consumer rights commission.

Amazon said the change was not due to criticism of its practices.

"We review our company structures regularly in order to ensure that we can serve our customers as best we can," the online retailer was quoted as saying.

According to other press reports, Amazon has also begun booking British sales in Britain.

In its budget this year, the Australian government flagged the introduction of a tax on multinational companies that shift profits out of Australia. Under the 'Google tax' draft legislation, the Australian Taxation Office would gain the the power to recover unpaid taxes, as well as issue a 100 percent fine for the unpaid taxes plus interest.

The UK has legislated the original Google Tax -- which levies a 25 percent tax on diverted profits.

With AAP