Global policy makers will ensure that Amazon.Com Inc will make sure when formulating their international tax plansIt is included, even if the American company's profit margin is below 10%, the proposed threshold that allows other countries to tax.
Finance ministers of the Group of Seven agreed last week on a tax deal so that some of the profits of large companies with profit margins of more than 10 per cent can be redistributed to other countries to be taxed. Amazon.Com Inc estimates global operating margins at about 7.1 per cent this year. But Amazon.Com Inc will be included and details of how to design policies to incorporate the company are still being discussed, according to two people familiar with the matter.
Negotiators are studying how to set up the mechanism, people familiar with the matter said. This could include setting a threshold for individual businesses such as Amazon.Com Inc's higher-margin cloud computing, rather than the company as a whole, whose margins are weighed down by heavy investment and meagre retail margins.
European leaders insist that all the largest Internet companies be included in the tax plan. G-20 finance ministers will try to reach a preliminary agreement in July.
Us Treasury Secretary Yellen was asked about Amazon.Com Inc and Facebook Inc at a news conference on Saturday.Inc. Gave an affirmative answer as to whether the company would be included in the agreement, but she did not say how the company would be covered given Amazon.Com Inc's low profit margin.
A spokesman for the Ministry of Finance on Monday declined to elaborate on how Amazon.Com Inc would be included in the plan. A spokesman for Amazon.Com Inc referred to the company's statement of support for the Gmur7 agreement issued on Saturday.