The announcement means that in future the company will put sales through registered subsidiaries in the UK, Germany, Spain and Italy, instead of processing all sales via the Amazon EU Sarl office in Luxembourg. It has also indicated the intention to set up a similar operation in France. The changes took effect from 1 May 2015.

In a statement, Amazon told Accountancy: ‘We regularly review our business structure to ensure that we are able to best serve our customers and provide additional product and services. More than two years ago we began the process of establishing local country branches of Amazon EU Sarl, our primary retail operating company in Europe.

‘As of May 1, Amazon EU Sarl is recording retail sales made to customers through these branches in the UK, Germany, Spain and Italy.  Previously, these retail sales were recorded in Luxembourg. We are working on opening a branch for France.’

Recently, the company has been under severe criticism from the EU, is under investigation by the European Commission for its tax arrangements in Luxembourg and in the UK has faced various probes by the Public Accounts Committee over allegations of tax avoidance.

In its most recent quarterly SEC filing dated 31 March, Amazon warned that ‘it is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax examinations in one or more jurisdictions. These assessments or settlements may or may not result in changes to our contingencies related to positions on prior years’ tax filings’.

The company is also in dispute with the US Internal Revenue Service (IRS), in particular Amazon highlights that ‘the IRS is seeking to increase our US taxable income by an amount that would result in additional federal tax of approximately $1.5bn (£960m), subject to interest. To date, we have not resolved this matter administratively and are currently contesting it in US Tax Court’.

The restructure of the European sales operation comes in light of the ongoing OECD Base Erosion & Profit Shifting (BEPS) project which will bring in new rules to control profit shifting and abuse of tax treaties, due to be published in November.

Earlier this month, Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration said the final BEPS package will be presented at the G20 summit in Turkey this November.

Speaking about technology multinationals in general, Saint-Amans said: ‘Most of these companies have been extremely aggressive, pushing the boundaries of what is legal.

'They have tried schemes that cannot resist further examination by tax administrations.

‘My advice would be instead of focusing on tax planning, please do the wonderful job you are doing on innovation and be much more conservative on tax planning

Saint-Amans said that over the last 20 years, jurisdictions had ‘ moved from a world where we were so good at eliminating double taxation with tax treaties and transfer pricing rules that we have facilitated double non-taxation'.

At the same time, the new diverted profits tax in the UK means that multinational digital companies are reviewing their tax arrangements in a bid to handle the new 25% tax charge, which is 5% above standard corporation tax.