The Curious Case Of Amazon: $800 Bn Valuation, $11.2 Bn Profit And Whopping $0 Tax

Must Read

LinkedIn Finally Rolls Out The Most Requested Feature By Users

Microsoft owned LinkedIn has recently been reported to have revamped its profile section with an amazing feature...

Google is Giving Microsoft a Taste of its Own Medicine

The latest version of the Microsoft Edge browser was launched about a month ago for Windows 10,...

Facebook Without Mark Zuckerberg And Sheryl Sandberg?

Imagine Facebook without Mark Zuckerberg and Sheryl Sandberg, the current CEO and COO of the world's largest..., Inc. (NASDAQ:AMZN) is currently valued at $800 billion – the third most valued tech firm, trailing behind only Microsoft and Apple – the two tech behemoths.

Jeff Bezos, CEO and Founder –, toppled Bill Gates, Founder of Microsoft, to become the richest person alive on this planet last year.

To top it all, in fiscal 2018, the company reported a net income of $10.07 billion, with a whopping 232% YoY growth.


The company’s U.S. profit before income tax increased to $11.2 billion in fiscal 2018, with a massive 98.2% YoY growth.

Any guesses for how much this global giant will pay by way of federal taxes this year?

An astronomical huge $0!!

Yes, you read it right!

While ordinary people like you and I, in spite of our meagre incomes, have been paying tiny amounts to the state exchequer year after year by way of taxes, this global giant will be walking away without paying a cent for the second year in a row.


Thanks to an absurd mix of exemptions, rebates, loopholes and tax credits which the company has exploited to the fullest, it actually reported a U.S. federal income tax rebate of $129 million. That makes its interest rate -1.2%!

Amazon $0 Tax Liability – Are You Serious?

As per a report published by the Institute on Taxation and Economic (ITEP) policy Wednesday, the U.S. based will walk away without paying a single dollar by way of federal taxes for the second successive year. This despite the fact that it doubled its U.S. profit from $5.6 billion in 2017 to $11.2 billion for 2018.

Amazon’s consistent policy of tax avoidance has long been lambasted by experts and politicians like. Even President Donald Trump blasted the company on Twitter by saying it paid “little or no taxes to state and local governments”.

And though the President’s volley of tweets against the global giant brought its shares down by 9%, the IETP holds his government’s policies responsible for the non-existent tax rate.

According to the ITEP report, the Tax Cuts and Jobs Act of 2017 lowered the corporate tax rates from 35% to 21%. At the same time, it came with a barrage of loopholes which allowed even “profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.”

“This is another situation where the rhetoric from President Trump is completely divorced from what he does and what his policies do,” pointed out Steve Wamhoff, ITEP’s Director of Federal Tax Policy.

The existing -1.2% federal income tax rate is way lower than the already low 11.4% which Amazon paid between 2011 and 2016, as per The Week.

How Did Amazon Pull This One-Off?

It all began earlier this year when Amazon reported that it did not owe a single penny by way of federal taxes on the profits generated by the company on the American soil for both 2017 and 2018. It also went on to state that it was, in fact, due for rebates from the federal government.

The company explained that its tax burden had fallen because of the depreciation of assets and deductions for stock-based compensation.

While the company has certainly attracted a lot of negative publicity because of having found out ways to reduce its overall tax burden, the company reported owing $322 million in taxes to various U.S. State governments and another $563 million in the rest of the world for 2018.

Amazon pays nearly 2.9% by way of state taxes.

“That’s certainly bigger than zero,” pointed out Matt Gardner, one of the people who produced the ITEP report.

Amazon, on its part, has denied evading any taxes. Jodi Seth, one of the official spokespeople of Amazon, has tried to downplay the matter by explaining how much Amazon is committed to the US market and its contribution to the country’s growth in the past many years.

Jodi didn’t forget to mention $125 billion invested Amazon has made in the US since 2011. He claimed that the major chunk of the investment went into building network of more than 125 fulfilment and sortation centres, air hubs and delivery stations as well as cloud-computing infrastructure and wind and solar farms.

Jodi was indirectly explaining the vital role Amazon has been playing in the US economic growth and stability.

Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment.

This is not the first time Amazon has been in the news for tax evasion or avoidance, whatever way one chooses to call it.

Tech giants like Google, Facebook and Uber too have been accused of employing smart lawyers to help them take advantage of legal loopholes to bring down their tax liabilities.


Please enter your comment!
Please enter your name here

Latest News

Backed By Narayan Murthy, Jeff Bezos To Go After Zomato And Swiggy!

Just when Zomato and Swiggy thought that after the acquisition of UberEats by Zomato, the food delivery...

India Wants A Bigger Chunk of $100 Billion In Global Taxes Levied On Google, Facebook and Amazon

It has been reportedly found out that India is adamantly pushing for a huge change at Organisation for Economic Cooperation and Development...

Facebook May Have To Pay $3.50 Per Month To Millions of Users?

Almost every internet tech giant, be it Facebook, Google or Twitter, has flourished by optimising and channelising their strategies that are largely...

Google Warns Users To Update Their Chrome Browser Right Away!

If you are an active user of the Chrome browser, Google wants you to stop all the work and update Chrome browser,...

TikTok Owner ByteDance Gearing Up To Challenge Facebook, Apple And Amazon!

ByteDance Inc. doesn’t want their massive success to go downhill after its blockbuster video app TikTok blew up in the social media...

Global Online Payment Frauds: Over $200 Billon Would Go Down The Drain In The Next 5 Years [REPORT]

The online payment frauds are becoming a new nightmare for digital users and authorities as well. It has been estimated that a...

In-Depth: Dprime

YouTube Should Have Bid Adieu To Dislike Button Much Earlier?

Online video sharing platform YouTube can be a ruthless place for content creators targeted by 'dislike mobs'. And the site owners totally understand that...

Facebook Has Pulled Off A Masterstroke By Integrating Its ‘Family Of Apps’?

It’s indeed hard to believe that ONE man sitting at Menlo Park, oversees how nearly a third of the world’s population interacts with each...

Facebook’s Crunch Conquest: By Relying Largely On The US Market, Is Facebook Running a Risk?

Two billion! That's Facebook, Inc. (NASDAQ: FB) for you - Right when you thought that this social-media giant has already connected the entire world, it's...

More Articles Like This