The Left in the European Parliament presents a study to analyse the ways Amazon, as one of the major multinational enterprises (MNEs), has organized its domestic and international business to minimize taxation worldwide. The researchers identify Luxembourg as the coordinating centre of a global tax dodging operation.
Existing studies reached the conclusion that Amazon pays either very little tax or no tax at all in the US. However, due to reporting opacity, the precise numbers are disputed and Amazon’s activities outside the US are neglected.
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 (net operating losses that are used to reduce future tax liabilities), 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 indeed beyond the total income tax due in the group’s entire history. Thus, since 2011, the company has made more untaxed profits than the total amount of taxes it has ever owed.
The Amazon Method: How to take advantage of the international state system to avoid paying tax.
Study for The Left in the European Parliament.
Richard Phillips - Jenaline Pyle - Ronen Palan
Click here to read the full study (website of The Left in the European Parliament, formerly GUE/NGL)