Experts have raised concerns that Amazon may escape paying significantly more tax in some of its biggest markets unless world leaders close a large loophole in a historic global deal. Finance ministers in London from the G7 group of wealthy nations, including representatives of the UK, US and EU, on Saturday agreed the landmark deal aimed at making the biggest companies such as Apple, Microsoft, Google and Facebook pay more tax. The two “pillars” of the deal would make companies pay a percentage of their profits in markets where they make large sales despite minimal corporate presence, as well as setting an unprecedented global minimum corporation tax. However, a communique from G7 ministers said that they envisaged pillar one would only apply on “profit exceeding a 10% margin for the largest and most profitable multinational enterprises”, a restriction that could rule out Amazon. Amazon is one of the largest businesses in the world, with a market value of $1.6tn (£1.1tn) and sales of $386bn in 2020. A Luxembourg subsidiary paid zero corporation tax in 2020 on sales income from across Europe of €44bn (£38bn), making Amazon a prominent target for politicians campaigning for changes to the global tax system. However, its profit margin in 2020 was only 6.3%. It runs its online retail business at very low profit margins, partly because it reinvests heavily, and partly to gain market share. Richard Murphy, visiting professor of accounting at the Sheffield University management school, said the 10% profits threshold was “inappropriate” because of different business models for different companies. He added that current approaches to reporting profits in each country were “easily gamed”. “This could turn out to be a false hope unless they get the detail right,” he said. The G7 deal aimed to give momentum to talks at the larger G20 group of nations, followed by the Organisation for Economic Co-operation and Development (OECD), a club of mainly wealthy nations that has led tax negotiations for a decade. Campaigners said they hoped the later negotiations would include an approach known as “segmentation”, meaning profitable parts of businesses would pay tax in their own right. “Based on the communique Amazon is not captured,” said Paul Monaghan, chief executive of the Fair Tax Foundation, which accredits businesses that do not avoid tax. “If there’s another layer of detail that suggest Amazon will be captured that’s great, but it hasn’t emerged yet.” Janet Yellen, the US Treasury secretary, on Saturday told the Reuters news agency that she expected Facebook and Amazon to be covered by the proposal. “It will include large profitable firms and those firms, I believe, will qualify by almost any definition,” she said. A segmentation approach would mean a company like Amazon would pay tax in countries such as the UK on profits of subsidiaries such as Amazon Web Services, its lucrative web hosting arm. AWS made a margin of 30% in 2020, according to the Fair Tax Foundation. The US tech firm ended 2020 with more than $13.5bn in annual operating profits from annual AWS revenue of $45.4bn, up nearly 30% year on year. Sources said that while the G7 sealed an over-arching agreement, details about how to carve up the revenues of big corporations into their constituent parts for tax purposes had yet to be agreed. It is possible that some businesses will be able to rejig their operations to offset profits against loss-making units to remain under the 10% threshold, unless tough rules are in place. Alex Cobham, chief executive of Tax Justice Network, said: “If the OECD cannot ensure Amazon is in scope, not only will it fail to meet the public demand for fairness here, it will also offer a blueprint for other major multinationals to escape this element of the reform.” Work is under way by the OECD under the banner of its inclusive framework to resolve how companies should be taxed ahead of a meeting by the G20 groups of countries in July that is expected to ratify the G7 deal. It is expected that 135 countries that have signed up to the OECD scheme will benefit from extra tax revenues from large corporations. George Turner, director of TaxWatch UK, a thinktank, said it would be vital to ascertain whether tech companies would pay more UK tax overall, after the UK and other nations including France conceded that they will remove unilateral digital services taxes that aimed to target big tech. “It could be taking with one hand and giving with the other,” Turner said. Facebook, the social network company, on Saturday said it believed it will pay more tax. However, Amazon was unable to say whether it expected to pay more tax. An Amazon spokesperson said: “We believe an OECD-led process that creates a multilateral solution will help bring stability to the international tax system. The agreement by the G7 marks a welcome step forward in the effort to achieve this goal. We hope to see discussions continue to advance with the broader G20 and Inclusive Framework alliance.”