Will Amazon use this loophole in the new G7 tax deal?
Last weekend, the finance ministers of the G7, reached a historic agreement on a minimum tax rate for multinationals.What is written in the little lines of the G7 tax deal?
G7 finance ministers gathered in Cornwall to discuss a new global tax system to ensure that the world's largest multinational companies can no longer use loopholes to evade taxes.
They agreed on a minimum tax of 15%
Honestly, I think it is fair; I have no problem paying taxes as long as they are reasonable and applicable to every business.
As our politicians calculated, this deal would bring in an extra 80 billion, paid mainly by the big companies, like Apple, Facebook, Google, Microsoft,... the global players.
I am missing one name, right? Amazon!
Exactly, here is the issue. The small prints of the deal state that the minimum tax rate of 15% counts for companies who have a profit margin of 10%
Well, you can imagine what I will say next, Amazon latest profit margin of 7.5%.
Second, the deal states a minimum of 15%; what will happen with the local players? Will they keep their high tax rate anyway? Example Bol.com in the Netherlands.
The Ministers of Finance are so proud to close loopholes.
As you can see, there are still many others.
I hope their national finances are better done than this deal.