American Tax Officer

Chapter 611: Chapter 308: Amazon, You’re So Arrogant!
 

“Okay, I’ll pass your message on to them!”

About two hours after ending the call with Sean, David’s phone rang again, and when he saw it was Deputy Director Donald’s number, his heart instantly raced.

Could it be that the Ansa Group had made a breakthrough?

That efficient, huh!

Without dwelling on it too much, he immediately pressed the answer key with anticipation, “Deputy Director Donald.”

“David, regarding the matter of moving you to the headquarters, all our senior executives are now aligned. However, you’ll have to complete a task first.”

“What task?”

“Take down Amazon!”

“Take down Amazon?”

David was somewhat baffled.

Of course, he was aware of Amazon, the world’s largest e-commerce platform, with a market value of nearly 2 trillion US dollars, and its founder, Jeff Bezos, had been the world’s richest person four times, with a personal fortune of over a hundred billion US dollars.

But, having said that, while Amazon is a corporate giant in America, there are other companies on the same level. Why had the senior executives insisted on him taking down this particular one?

“This is a thorny problem, I’ll send you information on Amazon later. As long as you can handle them, you’ll be immediately transferred to headquarters!”

“Alright, I accept!”

Amazon is a behemoth, and tackling them would certainly require a great deal of effort, but since headquarters had said he’d be moved there as soon as he took care of it, it was worth the effort no matter what.

Shortly after the call ended, David received an email with a file on Amazon.

After reading through the initial contents of the document, he finally understood why headquarters had specifically tasked him with taking on the e-commerce titan.

According to Amazon’s financial data over the past few years,

In 2017, Amazon’s revenue was 177.87 billion US dollars, profit was 5.6 billion US dollars, federal tax rate was -2.5%, no taxes paid, and they received a tax refund of 137 million US dollars from the government.

In 2018, Amazon’s revenue was 258.22 billion US dollars, profit was 11.2 billion US dollars, federal tax rate was -1.2%, paying no taxes and again procuring a tax refund of 129 million US dollars from the government.

In 2019, Amazon’s revenue was 280.5 billion US dollars, net profit was 11.6 billion US dollars, and perhaps under pressure, Amazon finally paid taxes, although not a significant amount, paying a total of 162 million US dollars in federal taxes.

As for 2020 and 2021, due to pressure, Amazon also voluntarily paid some taxes.

However, summing up all the taxes from 2017 to 2021, Amazon’s actual tax payments were still zero, as they had been exploiting tax policies and receiving government tax subsidies every year. In other words, over these years, Amazon not only had not paid taxes but had also been subsidizing itself through tax policy loopholes.

“Is Amazon really that outrageous?”

David had not conducted an investigation into Amazon, but now, seeing the information sent by headquarters, he realized just how outrageous Amazon was.@@novelbin@@

As it is well known in America, there is a saying, “Only death and taxes are inevitable.”

But this adage doesn’t seem to apply to Amazon as it is now.

You should know that in America, most companies, no matter how well-connected, still have to make some contribution to the IRS.

Just like Apple Inc., they avoid most of the tax burden through offshore registration locations and policy maneuvers, but still pay the IRS a few billion dollars in taxes every year.

But Amazon, oh no, not only do they not contribute a cent, but they also take money from the IRS every year?

This is not just the ‘thorny problem’ as described by Donald, it’s practically an assassin!

To thoroughly understand the tax avoidance methods of Amazon, David practically scrutinized every word of the document for the following period of time.

And after spending more than an hour on this research, he had a general grasp of Amazon’s tax avoidance techniques.

Firstly, to maintain its status as a technological superpower and encourage innovation, America allows for tax reduction on research and development investment. Amazon’s investment in R&D, which accounts for about 7% of their payroll and benefits, has always been at the forefront among tech giants, allowing it to dodge about 23% of its taxes each year through R&D tax deductions.

Secondly, before 2005, Amazon began expanding into Europe. At that time, America taxed globally, with a federal tax rate of 35%. Repatriating foreign income required paying taxes to America, so Amazon lowered its overseas taxes and retained profits abroad. This was because Amazon revamped its European business operations in 2006, setting up a tax avoidance structure via a Luxembourg shell company to act as its operating entity in America.

This is quite similar to the tax avoidance tactics of Apple and most other companies.

Lastly, they relied on stock option forfeiture deductions.

Many companies give senior staff stock options as a substitute for wages, and the value of these stock options can be deducted as a business expense.

The higher the company’s stock price, the greater the deductible expenses.

Most companies achieve this by repurchasing shares to drive up the stock price, then allocate them to employees.

Amazon, however, did not repurchase shares from the stock market but printed them out of thin air.

The ones who truly paid the price for this were Amazon’s shareholders, as the value of their existing shares was diluted by Amazon issuing more shares to its employees.

As long as the stock price of Amazon rose, this strategy would be effective.