Investors call on Amazon to increase tax transparency

Two dozen institutional investors are pressuring Amazon to provide more transparency on what taxes it pays around the world and how much it pays, a resolution first proposed by a Catholic investment fund and the Greater Manchester Pension Fund in December .

Investors including asset manager Nordea , Royal London and several large European and American pension funds are trying to agree on a shareholder resolution at this year’s annual meeting that , if passed, would significantly change Amazon’s public tax disclosures .

Amazon has been criticized for its tax transparency in the past . In January, it sent a letter to the U.S. Securities and Exchange Commission asking for approval to exclude the vote on the resolution from the next annual shareholder meeting . Amazon said that taxes are just an ordinary business matter and require a shareholder resolution exemption.

However, investors who support the proposal, which together oversee about $ 1.2 trillion in assets, are opposing it and lobbying the SEC to approve it.

The shareholder resolution requires Amazon to provide shareholders with a tax transparency report that does not contain confidential information in accordance with the Global Reporting Initiative (GRI) tax standards. This requires Amazon to publicly disclose its business activities , revenue , profits , and taxes paid in each country where it operates . Amazon currently does not publicly disclose its revenue , profits , and taxes in countries and regions outside the United States .

Investors believe that the compliance burden of Amazon's increased disclosure will be minimal. Under existing international rules, multinational companies are already required to provide country-by-country tax information to US tax authorities. This information is shared by tax authorities and is not released to the public. The benefits of these disclosures to investors will far outweigh any additional compliance actions.

Amazon said it already provides extensive and detailed disclosures on its income tax contributions, and publicly reports its total tax contributions in the United States, the United Kingdom , Italy, France and Spain .

More than 100 groups , including the New York City Comptroller’s Office , have signed on to support the agreement , as have several religious foundations focused on the environment , society and governance , though not all of them have invested in Amazon.

We have no way of knowing whether this resolution will be passed at this year's Amazon shareholders meeting, but tax disclosure has always been a demand of these institutional investors. We will have to wait and see what the follow-up progress will be.

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