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France to Amazon: You Owe Us $252M

Nov - 12 - 2012
Business Tips

Internet retailer Amazon said it had received a $ 252 million demand from the French tax authorities for back taxes, interest and penalties in relation to “the allocation of income between foreign jurisdictions”.

The claim comes as European countries step up efforts to clamp down on U.S. companies which minimize their tax bills in the continent by channeling profits through low-tax regimes.

Amazon said it would fight the tax claim, in court if necessary, and that the demand related to the calendar years 2006 through 2010.

“We disagree with the proposed assessment and intend to vigorously contest it,” the company said in its third quarter results filed last month.

An Amazon official referred to the tax demand, which had not been previously widely reported, at a UK parliamentary committee hearing.

Amazon minimizes its tax bill in France and other European countries by channeling sales through Luxembourg, which offers tax breaks to foreign companies which base themselves there.

Amazon said it received a proposed tax assessment from the tax authority in September but that it was still awaiting a final assessment.

Internet group Google is also under audit by the French tax authority regarding its structure, which channels sales through Ireland, but the company denied a newspaper report last month that it had received a back tax claim for 1 billion euros.

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