Digital tax: France to ‘fight’ for Amazon inclusion
France said on Wednesday it would make sure that Amazon is subject to a minimum global tax endorsed by the G7 nations.
According to the plan, countries would be allowed to tax a share of the profits of the most profitable companies in the world at a rate of at least 15%, regardless of where they are based. This would apply, however, only to companies whose profit margins exceed 10%.
Despite Amazon’s market capitalisation of more than $1 trillion, its profit margin last year amounted to just 6.3%, placing it firmly below that threshold. But French finance minister Bruno Le Maire told the broadcaster
that the potential loophole would not stand. The tax reform “must apply to Amazon”, he said. “France will fight to make sure that it does.” “The problem with Amazon is that some of its businesses don’t generate a profit margin of more than 10%,” Le Maire said, singling out its deliveries branch. At Amazon’s cloud-based services, meanwhile, margins are “very large”, he said. The answer was to treat Amazon’s businesses separately for tax purposes “so that all the very profitable parts are certain to be subject to this digital taxation”.