Western governments plotting a tax crackdown on multinationals could target Amazon’s cloud computing arm, despite the company appearing to fall outside the scope of a planned minimum corporation tax.
Reports had suggested that Amazon could avoid the minimum tax rate, since its company-wide profit margins are typically below the 10pc identified by the agreement reached this weekend by G7 finance ministers.
However, the OECD, which is at the centre of the plans, is considering treating Amazon Web Services, its cloud computing division, as a separate entity, according to the Financial Times.
AWS, which rents out computing power and hosting to thousands of customers such as Netflix and Snapchat, enjoys much higher margins than the company as a whole.
It has had an operating margin of 30pc in the last 12 months, compared to 6.6pc for Amazon as a whole, 4.2pc for its North American retail operation, and 2pc for its International retail business. AWS has made $14.6bn (£10.3bn) in operating profits in the last 12 months, more than its entire retail business.