AWS can tax Amazon more

If it becomes de facto globally accepted, Amazon does not appear to be able to swim to pay a significantly higher corporate tax rate of at least 15% in the countries in which it operates. Long before the agreement reached at last week’s summit of G7 finance ministers, the question was whether the company could be subject to stricter tax rules, but press releases according to AWS’s high profit rate, this should not be an issue.

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Part of last Saturday’s agreement was that the global minimum tax would only be paid by companies with a profit margin of 10% – although this is not the case for Amazon, the G7 has smuggled a clause into the agreement that if if a company ‘s “significant division” exceeds this limit (namely, the profit share of the AWS division is more than 30%), then the new tax minimum must be applied to the company as a whole.

According to Reuters sources, the pass was made by G7 finance ministers specifically to prevent Amazon from circumventing the higher corporate tax rate – the decision-maker has not commented on the merits so far.

Importantly, the institution of a global minimum tax still does not oblige any nation state to reform its tax system, but it can put pressure on the governments of tax havens such as Ireland. The proposal, adopted by the G7, could be discussed by the G20 in July, after which a more accurate picture of how global support for the new tax system will actually emerge.


Source: HWSW Informatikai Hírmagazin by www.hwsw.hu.

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