How will Amazon navigate Australia’s taxation system?

With Amazon expected to open its doors in Australia this year, questions are being asked about how this US giant with a reputation for tax avoidance in the UK and Europe will navigate the Australian taxation system.

Global firms such as Starbucks, Google and Amazon have come under fire for dodging tax on earnings in various jurisdictions. Such multinational firms often have complicated tax structures that minimise and shroud how much tax they really pay.

Notably, Amazon’s blueprint for avoiding tax was known as Project Goldcrest, a tax scheme named after Luxembourg’s national bird, based on a 2003 deal with Luxembourg’s authorities.

Project Goldcrest used a series of complex inter-company contracts to transfer intangible assets such as software, marketing assets and trademarks to one of the Amazon companies in Luxembourg, where tax rates are low.

Amazon has consistently minimised its taxes by managing its books to keep profits low over the past 20 years. This includes investing heavily in specialised staff and projects such as data centres. In a statement, Amazon said the company has constantly invested in infrastructure because “corporate tax is based on profits, not revenues”.

Amazon in the UK

The Amazon experience in the UK, where it has been operating and growing at a tremendous pace for some years now, provides a telling test case of how the company is likely to operate in Australia. Read more

Roman Lanis & Brett Govendir – The Conversation – 11 Oct 2017