10 years of Amazon in Spain
Amazon is a powerful engine of growth for the Spanish economy. Through innovation, investments and job creation, Amazon is helping transform the economic potential of urban and rural communities. In the ten years Amazon has been operative in Spain – amazon.es launched in September 2011 – we have achieved important milestones that go well beyond the quality and delivery of goods and services to customers. We have become an integral part of the country´s business fabric and the communities where we work and live.
We’ve invested heavily in the Spanish economy and in its people, more than €6.8 billion in ten years, and we currently employ 12,000 talented individuals who receive competitive pay and comprehensive benefits from day one. I’m particularly proud of our growing team and our investments on behalf of customers and how we are supporting thousands of small businesses contribute to Spain's recovery, creating thousands of additional jobs and opening up new opportunities for many others in their regions.
Investing in infrastructure
Since 2011, Amazon has made investments in our Spanish operations of more than €6.8 Billion. This includes both capital expenditure (such as the infrastructure we build, our logistics centers, corporate offices and cloud infrastructure), and operating expenditure (such as the salaries we pay to our employees in Spain). In 2020 alone, we have invested over €2.5 Billion in the country as we try to get closer to our customers and improve our services at a time that due to the COVID pandemic many have come to rely on Amazon bringing the goods they need in a safe and timely manner.
Amazon's current network in Spain encompasses over 30 different sites. In 2020 alone, the company opened two new fulfillment centers in Dos Hermanas (Seville) and Alcalá de Henares (Madrid), as well as three delivery stations in Murcia, Rubí (Barcelona) and Leganés (Madrid). Our logistics footprint will continue to widen in 2021 by opening fulfilment centers and delivery stations to increase product selection and better support small independent sellers, while creating new quality jobs in the Communities where we operate. Not only big cities benefit from Amazon economic impact but also smaller towns across different regions that are seeing how Amazon is helping them to reduce their unemployment.
Amazon is also expanding its rapidly growing Tech hubs in Madrid and Barcelona where almost 600 software developers, computer engineers and data scientists are working on applications for Amazon Business, Kindle technologies, retail, and machine learning. Amazon Web Services will launch a new AWS Europe (Spain) Region, which is expected to open late 2022 or early 2023.
Our investments are aimed at building the necessary digital and physical infrastructure to deliver products and services to millions of Spanish customers. More than half of those products do not actually come from Amazon, but from the more than 9,000 Spanish SMEs selling on Amazon. Their success is our success and we will continue investing in tools and services so they can help Spain recover faster from the current difficult circumstances.
Amazon has become a major engine for job creation in Spain. Amazon’s local Spanish-based workforce has grown rapidly to reach more than 12,000 people at the end of 2020. That´s more than 20 permanent jobs a week created in Spain by Amazon in the last 10 years. In 2020, Amazon paid on average, €27.4 million Euro per month in wages and salaries to our Spanish employees.
We offer opportunities to people with a wide range of qualifications, be they young professionals or experienced specialists and executives in fields such as software development, linguists, logistics, human resources and IT across our corporate offices and logistics network. Our state-of-the art facilities offer local employees a great working environment, opportunities for professional development, competitive salaries and rewarding benefits. Our people are what make this company great, and we reward them well.
All employees regardless of tenure or seniority receive a competitive salary and benefits package, which includes private health insurance from their first day and a pension plan. For those working in our logistics centers, salaries vary depending on the region in which they are located. If we take Madrid as reference, the base entry salary is more than 20,300 euros gross and, on top of the standard benefits, we offer our permanent employees a special education program which pre-pays 95% of tuition and associated fees to undertake nationally recognized courses, funding up to €8,000 over four years.
Across the company, we write diversity in capital letters and provide equal opportunities to everyone. In 2021, we have been recognized with the Top Employer certification in recognition to our diverse and welcoming work environment, our professional development opportunities and training programs.
Through indirect effects of our investments and operations, more than 82,000 new jobs were created in 2020, for example, in construction, logistics and by Spanish SMES selling on Amazon stores and benefiting from services like Fulfillment by Amazon to grow their businesses and export made-in-Spain products around the world.
Enabling Spanish businesses
In addition to investing in our communities and creating jobs, we also invest in tools and support for a large number of businesses across the country who use our technology and services to grow their businesses through increased sales within, and beyond, Spain.
In 2019, there were more than 9,000 Spanish small and medium-sized enterprises (SMEs) selling on our stores. About half of these were exporting their goods all over the world reactive more than €450 million in international sales. In addition, those selling partners have created more than 14,000 jobs so far. Spanish SMEs sold more than 40 million products in Amazon stores in 2020, 33% more than the previous year.
Amazon Web Services is also helping Spanish business to grow. To support the digital transformation of our economy, AWS announced on October 2019 it will be opening a new AWS Region in Spain enabling Spanish customers, including SMBs, start-ups, large enterprises or government agencies, to run workloads and store data in Spain and serve its end-users with even lower latency. Millions of customers already trust AWS to power their infrastructure, become more agile, lower costs and support them in their digital transformation. The AWS Europe (Spain) Region is expected to open late 2022 or early 2023, and it will be AWS’s seventh region in Europe, joining existing regions in Dublin, Frankfurt, London, Paris, Stockholm and Milan.
Investing in sustainability
At Amazon, we have decided to use our size and scale to make a difference for the planet. Amazon is the first signatory of The Climate Pledge, which was launched together with NGO Global Optimism. That means we are committed to becoming net zero carbon across our entire global business by 2040 –a decade ahead of the Paris Agreement’s goal. We are working towards these goals by taking immediate action across our business operations: Be it energy usage, transportation or packaging. One of our programs, “Shipment Zero”, aims at making all Amazon shipments carbon neutral with the goal of reaching 50% of our shipments by 2030.
When it comes to renewable energy, Amazon has two solar energy projects in Spain that will generate a total of 199 megawatts (MW). The first large-scale renewable energy project in Spain will provide 149 megawatts (MW) of renewable capacity for the company’s fulfillment network and the upcoming Amazon Web Services Region in the country. The solar farm is located in the southeast of Seville and is generating over 300,000 MWh of renewable energy annually. The second solar plant will be located in Aragon and will provide 50 megawatts (MW) of capacity.
In 2020, we banned the sale on amazon.es of certain single-use plastic products such as cotton buds and straws, cutlery, plates or drink stirrers as well as those made of oxo-degradable plastic. We have launched a ‘Climate Pledge Friendly’ label, an easy way to find sustainable products on our store. Currently, there are tens of thousands of items labelled as Climate Pledge Friendly because they possess one or more sustainability certifications.
Total tax contributions in Spain
As we continue to hire, invest, and grow in Spain, we contribute our share to fund public services and infrastructure throughout the country. We do this through the taxes that are collected by the government as a consequence of our activities in Spain. Those taxes fall into two categories:
- Directly incurred taxes: the taxes that are directly incurred and payable by Amazon, including Corporate Income Tax, taxes paid for land acquisition or construction, payroll taxes and social security paid by employers, import duties.
- Indirect taxes collected and remitted: the taxes we collect and remit from our customers, employees, and other third parties because of our business activities in Spain. These include VAT and the taxes paid by our employees withheld by Amazon.
It is important to understand both of those categories, because focusing narrowly on one aspect of taxation, such as Corporation Tax, does not tell the whole story: Corporation Tax according to some recent research conducted by the OECD accounts for only around 7% of total tax revenues from Spanish taxpayers.
Amazon is a growing business with a high volume of sales, but operating profits remain relatively low due to price pressure in a competitive market, intense capital investment programs, and increasing operating costs (including those from a growing workforce). Most governments –including the Spanish Government– actively encourage companies to make these investments, and they often use the taxation system to do so. On the one hand, these reduce Corporation Tax short term, but this is more than made up for by the increased tax revenue long term or lower costs for the Government in other areas.
This is how our tax numbers look like in detail:
- In 2020, the total revenues of Amazon’s activities in Spain were €5.4 billion.
- Our total tax contribution was over €261 million. This splits into:
- Our total directly incurred taxes were more than €140 million. Employer taxes accounted for the largest proportion of these.
- We collected an additional €121 million in indirect taxes as a result of our business in Spain.
Spain is a country of talent and opportunity, and we are pleased to play a role in fostering that, while supporting growth. Almost ten years since our launch in Spain, we are as excited as on Day One by the potential to continue to invest, invent, and create jobs and economic fallouts in communities across the country.