There has been much anguish expressed about the latest Amazon accounts for its UK operating company. This is unsurprising. Those accounts suggest that Amazon has increased its UK activity from £1.45bn of sales in 2016 to £1.99bn of sales in 2017, with its profits increasing threefold from £24m to £72m. Yet its overall apparent tax charge was still a minuscule £1.7m.

However, all is not as it seems. Once the tax effect of payments made to staff using share option schemes is taken out of account, this company looks as if it paid £4.7m in tax in 2017, compared with £3.7m the year before. That’s actual cash paid, and it suggests a tax rate of approximately 6.4% in 2017 compared with 15.5% in 2016. Given that the expected tax rate for the 2017 accounts was 19.25%, Amazon appeared to pay only a third of what might have been due.

Amazon explains the fuss by referring to the effect of those share payments. But that’s a sideshow, in my opinion. The reality is that Amazon is still a very long way from telling us all we need to know about its UK operations. We need to look at more accounts to see the real problem with Amazon’s UK tax.

The first of these are those of Amazon Inc for 2017. This is the US-based parent company of Amazon. Those accounts say that Amazon made sales of $11.37bn in the UK in 2017. At average exchange rates, that’s £8.87bn of UK sales. And now we see the problem. This means that £6.88bn of Amazon’s sales are missing from the accounts of its UK subsidiary. That is getting on for 75% of its UK activity. And given that Amazon in the US has a cash-paid tax rate overall of 21%, with much of that being paid outside the US, the question of how so little tax is apparently paid in the UK becomes even harder to explain.

Until, that is, another set of accounts is considered. These are the accounts for the UK branch of Amazon’s Luxembourg-based operating company, Amazon EU Sarl. Amazon says that the sales missing from the UK company accounts are recorded by that Luxembourg company, which it says has a taxable branch in this country. Which is good news, except for two things. First, we do not as yet have the 2017 accounts for this branch. And the 2016 accounts that Amazon filed for it with the UK’s Companies House were for the Luxembourg operation as a whole, and not just for the UK activity. Those accounts say it paid tax at a rate of 25.5%, but we do not know where that tax was paid. Nor do we know what UK profits it was paid on. Amazon does not say because it does not have to.

This is the nub of this issue, in my opinion. Amazon’s tax looks low because we can only confirm payment of tax of £4.7m, which is paid at one third of the expected rate on about one quarter of its UK activity. That could imply more than £50m of tax needs to be accounted for.

But the simple fact is that the missing payment might be in the accounts of Amazon’s Luxembourg company, and we will never know because Amazon can legally get away with not telling us. And that is the real issue that needs to be addressed because, until we improve the accounting for tax, we can’t have a meaningful debate on whether the right amount is paid by companies or not.

The fact is that the missing payment might be in the accounts of Amazon’s Luxembourg company, and we'll never know

Thankfully, there are readily available solutions. First, we need the accounts and company files for a UK branch to make clear what the activities of that branch are in the country where they are filed, including tax paid. It’s not acceptable that the figures be lost in totals for the company as a whole. UK law could be changed to require this.

Second, every multinational company with multiple trading entities in the UK as a whole should be required to file on public record a single set of accounts covering all of its UK operations so that we can see the whole picture for the company in this country in one single set of accounts. Without such accounts, a multitude of sins can be hidden from view by those companies who might want to do so.

Third, we need Amazon – and all large multinational corporations – to publish full country-by-country reports on their activities. I first proposed this idea in 2003; in 2016 the European commission proposed its adoption. But many EU member states are dragging their feet on it, even though it would show exactly what a company like Amazon makes in terms of sales, profit and tax paid in every country (including the tax havens) in which it operates.

We might get angry with Amazon. We may be right to do so. But frankly, we should be just as angry with our politicians. They are letting companies deliver poor quality 20th-century accounting when we need data fit for the 21st century. It’s time for a root-and-branch reform of accounting.

The accountancy profession will hate it. But we have to ignore them: full accounting transparency is the way to ensure that the right amount of tax is paid in the right place at the right time, and nothing less will do. We need new accounting laws and standards, now.

• Richard Murphy is a professor of practice in international political economy at City, University of London