Last Saturday, the G7 countries (Germany, Canada, USA, France, Italy, Japan and Great Britain) signed a historic agreement that sets a minimum tax rate of 15% for companies. This is a significant step towards a possible global tax reform. Note, however, that this agreement has already been criticized. On the initiative of Joe Biden, he was initially supposed to set a rate of 21%. Considered too high by some nations, it was eventually lowered to 15%.
According to experts, 15% is a ridiculous rate. In addition, a new problem has just been raised parallel to this debate. These discussions concern the definition of the companies that are affected by this minimum tax. The possibility that Amazon could evade this tax appears particularly problematic. An annoying situation, as it is not necessary to point out that this agreement is addressed in particular to GAFA.
Amazon achieves a 6.3% margin with e-commerce
The G7 press release on the signing of this agreement stipulates that the minimum tax will take effect as soon as the margin achieved by any of these large companies exceeds 10%. With the $ 386.1 billion in revenue Amazon generated in 2020, we say the company is automatically affected by this agreement. In reality, it’s not that safe. In its e-commerce activities, Amazon achieved a worldwide margin of 6.3%, well below the 10% required by the G7 agreement. Most of Amazon’s revenue comes from its cloud services with AWS ($ 13.5 billion out of $ 17.76 billion in net revenue in 2020).
Paul Monaghan, who founded the Fair Tax Foundation together with Richard Livings in 2014, explains in an interview with The guard : “According to the statement, Amazon is not affected. If there’s one more level of detail that suggests Amazon will be concerned, that’s fine, but it hasn’t surfaced yet.“ In other words, if we stick to the G7 statement, Amazon should avoid this tax.