Basically, Amazon US pays its Luxemburg subsidiary inflated fees for the right to use its own software. The effect is to move large chunks of Amazon’s profit to countries where the tax rate is lower. The cool thing is that, apparently, both Microsoft and Google do the same thing.
Wal-Mart operates a similar scheme:
As the world’s biggest retailer, Wal-Mart Stores Inc. pays billions of dollars a year in rent for its stores. Luckily for Wal-Mart, in about 25 states it has been paying most of that rent to itself — and then deducting that amount from its state taxes.
My question is: how do the rest of us get in on these scams?