You might think a company that makes more than $11 billion in profit would have a huge tax bill. After all, that makes complete sense. However, in the case of Amazon, the online retail giant, their tax bill is quite small. In fact, according to recent reports, the company will be paying a whopping $0 in taxes on their 2018 profit of $11.2 billion.
How is that possible? It’s difficult to know exactly all the measures Amazon takes to avoid paying any tax on $11.2 billion. However, it all starts with the Tax Cut and Jobs Act. Thanks to the TCJA, the company’s tax liability dropped from 35 percent to 21 percent last year.
The company also uses every available tax break to further reduce its tax bill, including exemptions, credits and tax loopholes. This isn’t the first time the company has paid zero tax. They did the same in 2017, on $5.6 billion in profit.
However, the company claims that it pays all the taxes it’s required to pay in the U.S. and every other country in the world in which they operate. The news comes despite President Trump’s promises to make companies like Amazon pay their fair share of taxes. However, it remains clear that the many open loopholes still allow massive corporations to avoid paying tax.