According to reports, the G7 countries are exploring ways to tax Amazon more heavily by separating the more profitable Amazon Web Services industry from its retail business. reported the Financial Times. The international grouping, which includes the USA, Great Britain, France, Japan, Germany, Italy and the European Union, had all in one Communique after the 47th summit organized by Great Britain that they “address the tax challenges arising from globalization and digitization of the economy and adopt a global minimum tax”. India may reportedly oppose this move as it would not be able to set its own corporate tax rates.
As part of this, FT reported, the finance ministers of the grouping countries are planning to “raid” Amazon’s cloud computing operations, so to speak. Such a step would be difficult to carry through, as it would have to take the form of targeted rule-setting that applies to a class of companies without obviously putting Amazon in the black. The US would likely benefit most from such an agreement, FT reported, given that a large proportion of technology company customers are in the US.
In India, the government introduced a 2% equalization levy, which, according to the US, is double taxation and discriminates against American companies. The United States Sales Agent said after an investigation that the tax was in addition to sales tax and discriminatory. As such, the US is announced and blocked immediately Tariffs on basmati rice, gemstones, bamboo products and more from India.
“The United States remains determined to reach consensus on international tax issues through the OECD and G20 processes. Actions today will allow time for these negotiations to move forward while retaining the option to impose Section 301 tariffs if warranted in the future, ”CTR Katherine Tai said.