Amazon expects new G7 minimum international company rate agreed to be applied even if its profit margin does not reach 10%.

Amazon will not circumvent the new minimum worldwide corporate tax rate that G7 member countries agreed to promote this past weekend, which establishes a floor of 15% in this tax to avoid monetary competition and encourage multinationals to tax in all jurisdictions in which they offer their products or services, and not only in those that offer them greater tax benefits.

In fact, a spokesman for the los angeles u.s. multinational has ensured that Amazon expected to apply to any agreement economic reach in the heart of los angeles Organization for the los angeles Economic Cooperation and Development (OECD), according to Bloomberg, which ensures that 2 sources close to the negotiations of the agreement on the new minimum rate of companies have confirmed that Amazon will be affected by this measure, although still being worked out how to apply it.

Amazon expects new G7 minimum international company rate

In fact, l. A. OECD has spent months negotiating this agreement, that could be closed in October, although previously you could close another covenant preliminary between the finance ministers of the G20 in July, which would be developed at the end of this year, according to the economic environment, which requires that any international consensus on this issue will have to be ratified by each of the one hundred forty countries participating in the negotiations of los angeles OECD and subsequently incorporated into its legislation.

In principle, the agreement reached this past weekend by the G7 established that the minimum worldwide corporate tax rate of 15% would only apply to multinationals with a profit margin greater than 10%, which would leave out in principle Amazon, which reached last year a margin of 6.3%. For this year, l. A. Company founded by Jeff Bezos estimates that it could reach 7.1%, although they do expect to be affected by the G7 agreement, according to Bloomberg.

Amazon expects new G7 minimum international company rate

Despite the fact that it is still unknown how will the G20 or l. A. OECD l. A. Tax international corporate tax to big companies like Amazon, sources close to the negotiations have insured the economic environment which could be a mechanism for assessing the operations of each of its business units, given that its advertising and cloud computing itself exceed the minimum margins required by the G7, instead of taxing l. A. Business as a whole.

Amazon expects new G7 minimum international company rate: This weekend, U.S. Treasury Secretary Janet Yellen already advanced that Amazon would fall within the scope of the new minimum worldwide type of companies, although he did not offer explanations about how this new financial regulation would apply. In principle, the White House had advocated a new global minimum tax on corporate income, with a rate of 21% on the turnover obtained by US multinationals outside their country.

Other countries, such as France, have also advocated a rate above 15% to reduce the attractiveness of tax havens and raise tax revenues, while other countries with low taxation, such as Ireland, have criticized the measure, claiming that it will affect their coffers. For his part, the new fashionable secretary of the OECD, Mathias Cormann, has told Bloomberg that the G7 agreement is a significant first step and has defended that it gives Los angeles room for tax competition between countries.

Amazon expects new G7 minimum international company rate

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The historic agreement on the international minimum corporate tax leaves in the air the execution of l. A. Controversial Google rate

The Google tax, officially known as a Tax on Certain Digital Services, can be counted even before it is executed.

Last Tuesday, after several extensions, the Council of Ministers was expected to approve the implementation of this tax, in addition to finally specifying its regulations, to clarify the many doubts it had generated in all the companies affected.

Without any explanation, none of that happened. Weeks earlier, the government had received angry pressure, especially from the footwear industry, not to implement this tax. Was L. A. Footwear industry affected by Los Angeles Google rate? Not directly, but the US government, after several warnings, had approved los angeles imposing tariffs of 25% on certain (it seems that this term is a common place in this matter) Spanish products if Spain finally implemented this tax unilaterally, which affected, among others, American companies such as Google, Facebook or Amazon.

To do this, Biden announced the Los angeles imposition of tariffs, but left them on hold for one hundred eighty days. It now seems clear that these movements already contemplated the Possibility of an imminent international agreement on Taxation.

The pressures of the Los Angeles footwear industry were not the only ones, although they were the only ones to which the Spanish Government paid attention. Before, associations of digital companies, such as Adigital (which belong to Apple, Google or Facebook) or Ametic and even the CEOE had already insisted time and again on the risks of applying this tax unilaterally.

And, more modestly, companies such as Axel Springer España, Auto Bild, Computer Today and Hobby Consoles, had also expressed their discontent about, since due to the arbitrary and in no time detailed conditions to be taxed by this tax -more than 3 million billing nearby and more than 750 million level international - where also was included, as are other companies (like some advertising agencies) despite complying strictly with l. A. Taxation in Spain based on your real profits.

A “collateral damage” that the Government knew, and that, according to sources in the Ministry of Economy, technology is necessary to achieve a revenue of close to 1,000 million euros per year, which, together with the revenue arising from los angeles implementation of other new taxes -as tax to l. A. Aviation and maritime transport, los angeles Tobin tax, or tax on plastic containers are not recycled, would allow the Government to comply with the requirements of Brussels to l. A. Approval of their budgets.

In other words, what at first was going to be a way for the big tech are taxed in our country on the basis of your current billing taxing income rather than the benefits (which are semi tax havens such as Ireland), ended up being a mere tool collection, as demonstrated in the own end conditions: while in France the tax itself was l. A. Basis of local revenues of 25 billion euros in Spain was reduced to 3 million -despite the fact that l. A. Minister Nadia Calviño had promised that it would be similar-a way to “put in the sack” many more companies and therefore increase revenue.

An arbitrariness that causes some companies in the same area, such as the media, with the same digital business model and a similar turnover in Spain are affected by this tax, and others not, by the easy fact of entering or not in that unexplained range of three million local and 750 million global.

For more inri, Google and Amazon lacked time to increase all their services with between 2 and three% to offset the arrival of this tax. The immense power and the Great dependence that many companies have on these two giants made any protest absurd: either you take it or you leave it.

And there's more. The Tax on Certain Digital Services is so ambiguous and confusing in its explanation and what needs to be included as such, that for many companies it is impossible to determine its processing without resorting to a consultant, as has been the case of Axel Springer España, which also has many contracted services, such as los angeles, practically all of the media in Spain, with Google.

This means that, in case this tax is finally executed, Axel Springer Spain will have to pay three times: the tax itself, the Google surcharge and the cost of financial advice.

All this while the Government of Spain is promoting the digital transformation of the country and companies, something that seems contradictory if companies are criminalized for their digital business, as is the case of the media, which are already very advanced in digitalization, forced by the fall of the printed business.

This weekend's historic agreement, which will have to be approved and ratified in July by the G-20 in Venice, may finally ensure that this tax is never implemented, ridding the government of a mess of unpredictable consequences.

Still, Los Angeles ' last word is yet to be said, and this week we will probably know the Government's final decision on this controversial issue.