Global policy makers are crafting their international tax plan to make sure
Group of Seven finance ministers
An Amazon spokesperson said the company “fully expects to be in the scope of any final agreement at the OECD,” referring to the eventual deal expected from the Organization for Economic Cooperation and Development referenced in the G-7 statement.
Amazon shares dropped as much as 1.1% to $3,172.20, briefly hitting a session low on the news, before closing the day little changed.
Negotiators are working on the mechanism, the people said. That could include setting a threshold for individual operations that targets Amazon’s more-profitable cloud computing or advertising businesses, rather than the whole company, whose margins are weighed down by heavy investment and thin retail profits.
European leaders have insisted on a way of including all the largest online companies in the tax plan. Group of 20 finance ministers are trying to reach a preliminary deal in July, followed by a more detailed agreement expected later this year.
Even with those international agreements, there would still be considerable uncertainty for how quickly these changes would come for Amazon and other multinational companies. Parts of the deal would have to be ratified and implemented with domestic tax policy in around 140 countries negotiating in talks led by the OECD.
Asked at a press conference Saturday if companies such as Amazon and
A Treasury Department spokeswoman on Monday declined to elaborate on how Amazon would be part of the scope.
Tech companies have largely supported efforts to update and harmonize international tax policy to bring more certainty to their global business operations, according to
“What’s most important is to write rules of general applicability that will function well for the broad economy,” Schruers said. “Whether it’s one company or one industry or one sector, trying to write tax rules around a small number of companies is not going to provide the results that we need.”
Reallocating how countries tax multinationals is one part of the accord being negotiated through the OECD. The other part involves setting a worldwide minimum corporate tax rate of at least 15%, a move aimed at reducing the attractiveness of tax havens.
That element of the two-part global deal could actually provide the far bigger boost to government revenues, but it is also subject to disagreement as some small countries say they need low rates to lure investment from multinational firms.
The OECD’s Secretary General
(Updates with Amazon comment in third paragraph, trade group comment in 10th paragraph)
–With assistance from
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