Chart of the Day 8 June 2021 Amazon’s profits have soared – but its tax bill hasn’t Despite generating almost $45bn in profits between 2018 and 2020, Amazon paid just $1.9bn in US federal income tax. Drew Angerer/Getty Images A billboard depicting Jeff Bezos calls for higher taxes on the ultra-wealthy near the US Capitol on 17 May 2021 in Washington, DC. Sign UpGet the New Statesman's Morning Call email. Sign-up Despite generating almost $45bn in profits globally between 2018 and 2020, Amazon paid just $1.9bn in US federal income tax in the same period. Analysis of the company’s filings by the Institute on Taxation and Economic Policy shows that the tech giant’s effective federal tax rate in this period was just 4 per cent. In 2018 the company paid no federal income tax in the US, which is its largest market by far. Amazon's profits have surged, but its tax bill remains low Global profits and US federal tax ($bn) Institute on Taxation and Economic Policy; company filings Last weekend G7 finance ministers agreed a landmark deal under which the world’s largest companies, including Google and Facebook, would pay more tax in markets where they make large sales. At present, tech companies that sell services remotely can book profits in low-tax jurisdictions to minimise their tax bill. A second pillar of the agreement, if ratified, would set an unprecedented minimum global corporate tax rate of at least 15 per cent. Although the specifics of the agreement are still being determined, there is concern that Amazon could avoid having to pay more tax in countries where it does business. According to the G7 communiqué, countries “would be awarded taxing rights on at least 20 per cent of profit exceeding a 10 per cent margin for the largest and most profitable multinational enterprises”. Amazon’s profit margin, which reached a record 7.5 per cent in the first quarter of this year, has consistently fallen below this level. But its lucrative cloud-computing division, Amazon Web Services, generated an operating margin of 30 per cent in 2020. › Why we shouldn’t rush to celebrate Ollie Robinson’s suspension Aisha Majid is a New Statesman Media Group data journalist. Subscribe To stay on top of global affairs and enjoy even more international coverage subscribe for just £1 per month!