Amazon is only partially affected by the global minimum tax

US Treasury Secretary Janet Yellen. (Photo: Vasilis Asvestas / Shutterstock)

According to US Treasury Secretary Yellen, the new global minimum tax could only partially affect Amazon. The reason for the fear is the comparatively low profit margin.

After a visit by US Treasury Secretary Janet Yellen earlier this week, the EU put its own digital tax plans on hold so as not to jeopardize the global minimum tax project. At the beginning of July, over 130 countries agreed on such a globally applicable minimum tax of 15 percent. This applies to internationally operating companies that have an annual turnover of at least 750 million euros. Now, however, Yellen has raised concerns as to whether Amazon might not – at least in part – avoid paying the tax.

Minimum tax: Amazon not partially affected?

In an interview with the US financial broadcaster CNBC, Yellen said on the question of whether Amazon would fall under the planned new regulation for a global minimum tax: “That depends on whether the company reaches the profitability threshold or not, and I’m not sure of that.” . The background to this is that one of the two planned pillars of the tax reform relates to the profit margin. And that is comparatively low at Amazon. According to calculations, it should have been just 6.3 percent in 2020, as Spiegel Online writes.

Companies that are to be asked to pay for this as part of the planned global tax reform must have a return on sales of at least ten percent with a turnover of at least 20 billion dollars. It is unlikely that this threshold will be exceeded in 2021 either. If that were the case, Amazon would have to pay taxes where it operates and makes its profits – for example in Germany. However, Amazon would still have to pay the so-called minimum tax of 15 percent. Because the group meets the requirements for this.

An additional 126 billion euros through a tax deal

In total, hardly 10,000 companies worldwide are said to be affected by the global minimum tax. According to the Organization for Economic Cooperation and Development (OECD), the tax deal is set to flush over 126 billion euros into the coffers of the participating countries every year. Amazon is a corporation that is always in focus when it comes to tax justice and loopholes in tax laws. According to the French economist Gabriel Zucman, Amazon is supposed to effectively pay only 11.8 percent taxes around the world.

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