Amazon: French tax authority says we owe $252 million in back taxes

By on November 13, 2012, 8:27 AM

Amazon has been hit with a $252 million tax bill by French authorities. Officials say the debt comes as a result of back taxes, interest and penalties that have accrued with regards to what they call the allocation of income between foreign jurisdictions.

The online retailer says the French government believes they are owned back pay from 2006 through 2010. Amazon says they disagree with the proposed assessment and intent to vigorously contest it. They are prepared to dispute the claim through the legal system if need-be, according to Reuters.

An Amazon official first spoke of the tax demand during the recent UK parliamentary committee hearing. As of writing, the company has yet to issue any sort of press release or official statement concerning the matter.

The whole issue reportedly stems from the fact that European countries are in the process of cracking down on US companies that take advantage of local tax laws that require them to pay much less. In this specific instance, Amazon reduces their tax bill by selling goods through Luxembourg, a region that gives tax breaks to foreign companies if they build a base of operations there.

Google is reportedly going through a similar process. The French tax authority had audited the search giant over its method of channeling sales through Ireland, presumably to take advantage of lower tax rates. For their part, they’ve denied claims that the French government has sent them a bill for 1 billion euros.

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