The information revealed by The guard Risk of waves. As the United States resumes discussions on creating a global tax to balance the forces between multinational corporations and small structures, we are now learning that, despite record sales in Europe in 2020, Amazon did not pay corporate tax.
Despite sales to the highest Amazon, Amazon still pays no taxes in Europe
Thanks to the pandemic, Amazon pulverized the results in 2020. Containment requires, many people have turned to online shopping to compensate for store closures. Teleworking has also enabled its subsidiary Amazon Web Services to promote the use of its cloud and maintain its leadership position. According to the latest status Explanations (pdf) of the company would have a record turnover of 44 billion euros in Europe12 billion euros more than in the previous year.
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Problem: Amazon EU Sarl (the company’s subsidiary that manages sales for the UK, France, Germany, Italy, the Netherlands, Poland, Spain and Sweden) would have posted a loss of 1.2 billion euros. An amount that allows him not to pay taxes as losses are not taxed. Even stranger would have been that it would have benefited from tax credits of 56 million euros and recorded losses from previous years of 2.7 billion euros to offset taxes payable on future profits.
An omnipresent situation in which the many players in European e-commerce have difficulty facing the giant. Amazon uses the Luxembourg tax system to avoid paying taxes and continual investments to stifle the competition that has to pay them. A strategy that the company does not really hide and that explains that it is not making a profit and creating jobs in Europe: “Amazon pays all required taxes in every country in which we operate. The business tax is based on profits and not on sales. Our profits have remained low given our massive investments and the fact that retailing is a highly competitive, low margin business. We have invested over 78 billion euros in Europe since 2010. Most of this investment goes to finance infrastructure, which creates thousands of new jobs, generates significant local tax revenues, and supports small businesses.explains Jeff Bezos’ company.
Biden and global tax
In view of this financial package, we therefore better understand the desire of European leaders to impose a tax on multinational companies that do not pay taxes in Europe. Joe Biden, the President of the United States, has even spoken out in favor of a global tax to find a solution to the GAFA tax. This American project is being carried out in parallel to important negotiations within the OECDOrganization for economic cooperation and developmentto reform international taxation. The goal to be achieved is a fairer taxation of companies, especially multinationals and digital companies, in order to prevent them from exploiting the loopholes in the system. It’s about ending years of optimization or even tax evasion and abolishing tax havens.
A global tax floor would thus be agreed. The United States suggested a rate of 21%. Jeff Bezos, the founder of Amazon, even praised Mr. Biden’s proposals, saying Amazon was “in favor of increasing the corporate tax rate.”
The case revealed by The guard is unfortunately not only on Amazon. The six companies, along with Facebook, Google, Netflix, Apple, and Microsoft, are accused of avoiding $ 100 billion in taxes over the past decade, according to a report by the Fair Tax Foundation campaign group. Talks initiated by the United States with OECD countries should therefore make it possible in the coming years to curb the tax optimization practices of large groups.