Amazon’s murky global tax strategy has been revealed in a new study* “The Amazon Method”.
The researchers analyse Amazon’s “Tax Credit Arbitrage Scheme” and identify Luxembourg as the coordinating centre of a global tax dodging operation.
“In the middle of a costly pandemic, delivering tax justice and fairness worldwide is more vital than ever. We cannot afford the tax abuses of multinationals. Scammers like Amazon must pay their fair share back to the taxpayers they’ve been fleecing for years,” said Martin Schirdewan MEP, Co-President of The Left.
The research explains how Amazon’s Luxembourg subsidiaries report massive operating losses from their non-American business dealings. This enables the company to collect loss carryforwards**, which it turns into tax credits in the US, meaning the company is most likely paying little or no tax at all.
The amount of loss accumulated by 2020 goes beyond the total income tax due in the group’s entire history. Since 2011, the company has made more untaxed profits than the total amount of taxes it has ever owed.
🤑 Amazon gets rich by ripping off taxpayers.
⚠️ The Amazon case is typical of tax dodging strategies used by big corporations who are amassing a level of power & wealth that threatens democracy.
Our latest study 👉 https://t.co/Q4L3hCqJFV#MakeAmazonPay #AmazonCrime pic.twitter.com/kAZ487S5QT
— The Left in the European Parliament (@Left_EU) May 14, 2021
“Insufficient information and the murkiness of reporting is outrageous. It’s pretty much impossible for the public to see how much tax such corporate behemoths ultimately pay,” Schirdewan comments, referring to Amazon’s deliberate method of obfuscating its aggressive tax dodging.
“What’s certain is that Amazon is not the only major international company using methods like these. This research gives us precious insight into the tax planning strategies of global corporations more generally – especially Big Tech.”
“Enough of this rip-off, we need tax justice. For a start, this would mean proactive action by EU leaders to tackle tax dodging by companies such as Amazon, and a new, proper investigation by the European Commission. It means transparency and mandatory public country-by-country reporting for all large corporations. It also means not letting corporations play countries against each other by enforcing an effective global corporate minimum tax rate of 25%.”
“We need a digital tax on profits of large corporations to make Big Tech pay up. Crisis profiteers need to be taxed to cover the costs of the crisis. We need a European excess profit tax” Schirdewan concludes.
Study link: https://left.eu/amazon-method-of-tax-dodging-exposed-in-new-research/
*Study commissioned by The Left in the European Parliament and authored by Richard Phillips, CEO and chief Investigator, Iconomist Ltd and Honorary Senior Research Fellow, CITYPERC, City, University of London. Jenaline Pyle, PhD Candidate, Department of International Politics, City, University of London. Ronen Palan, Professor of International Political Economy, City, University of London and holder of an ERC Advanced Grant.
**An accounting practice that applies the current year’s net operating loss to the next year’s net income to lower tax liability.
