E-commerce titan Amazon Inc (NASDAQ:AMZN) will be exempt from the UK’s new digital services tax, however third party sellers and smaller businesses that use its platform will still be subject to the new levy.
According to a report in the Times, the corporation will not have to pay the levy on goods that it sells itself, instead paying a 2% charge only on revenues that it receives from third-party sellers that pay to use its online marketplace to sell to customers.
This charge will then be passed on in higher fees, in effect protecting Amazon from paying any of the cost and also providing an advantage over smaller retailers that use its site.
The situation appears to run contrary to the purpose of the tax when it was initially announced in April by Chancellor of the Exchequer Rishi Sunak, who said the levy will force global firms that make profits in the UK to pay their fair share of taxes in the country.
Amazon is not the only tech giant to try and avoid the new regime, with search engine Google, owned by Alphabet Inc (NASDAQ:GOOG), saying last month that advertisers will face a 2% charge on adverts run in the British market, rather than incurring costs itself.
Shares in Amazon were up 0.4% at US$3,457 in pre-market trading in New York on Wednesday.