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G7 countries explore ways to tax more of Amazon’s profit: Report

G7 countries are reportedly exploring ways to tax Amazon more by separating its more profitable Amazon Web Services vertical from its retail business, the Financial Times reported. The international grouping, which comprises the US, the UK, France, Japan, Germany, Italy and the European Union, had said in a communiqué following its UK-organized 47th summit that they would “address the tax challenges arising from globalisation and the digitalisation of the economy and to adopt a global minimum tax”. Reports claim that India may oppose this move as it would not be able to set its own corporate tax rates.

As a part of this, FT reported, the finance ministers of the countries in the grouping are “plotting a raid,” so to speak, on Amazon’s cloud computing operations. Such a move would be tricky to pull off, as it would have to come in the form of targeted rulemaking that applies across a class of companies without putting an obvious bullseye on Amazon’s back. The US would likely gain most from such an arrangement, FT reported, as a large share of tech companies’ clientele are in the US.

In India, the government introduced a 2% equalisation levy that the US said constituted double taxation and discriminating against American businesses. The United States Trade Representative said after an investigation that the tax was in addition to sales taxes and discriminatory. As such, the US announced and immediately suspended tariffs against basmati rice, gems, bamboo products, and more from India.

“The United States remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future,” USTR Katherine Tai said.

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© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ