Prime is considered a marketing expense. Amazon absorbs hundreds of millions or even a billion dollars in shipping charges through prime. It's a huge reason they have a thin profit margin.
That's populist propaganda. Businesses are taxed on profit, not revenue. Even if they were 100% based in the UK, they'd still probably pay very low corporate taxes (if any) due to the thin margin. They actually do pay an enormous amount of tax in the UK in the form of payroll taxes, VAT collections, etc.
It's sad to see people propagate this crap. It's really about veiled protectionism. A big, efficient player comes in and is willing to forego profit indefinitely. Can't tax them legally, so shame them. Tax on 0 is 0. That's how it works for UK companies too. Try reading between the lines...
I mean they don't pay corporation tax, they're based in Luxembourg for that reason. Why should I have to pay a ridiculous amount of money, when they don't pay anything.
They pay corp tax on the profit they earn in their UK's operations. Just like every other company with operations in the UK.
What percentage of your revenue do you pay in corporate taxes? None! You only pay a percentage of profit. (extremely thin for Amazon) They base in Luxembourg to benefit from UK laws and EU regulation. The UK media and government quoting billions in revenue is meaningless. They're trying to stir you up. They would relatively nothing in corp tax relative to their other tax footprint (payroll, vat, etc) and would absolutely spend it all to avoid doing so.
As SpikeGronim mentioned, they are operating at a very small profit. Investors are starting to get wary about it so they need to do something to increase those numbers.
If it made you buy product you wouldn't normally have bought through amazon then they can still make a profit even if the prime membership does not finance the whole shipping charges.
Spending 10 million on warehouses doesn't reduce their profit by 10 million for that quarter. The point is they do not make money, and people who somehow overlook this by suggesting they are focused on longer term infrastructure investments needs to brush up on accounting (profit vs cash flow). Capital expenditures are not treated as expenses.