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.




User Comments: 9

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9Nails, TechSpot Paladin, said:

I'm taxed by the State on the money I earn. It's double dipping to tax me again on the same money when I spend. Of course consumers will look elsewhere to spend their money. Simplifying the tax laws for state and local cities would fix such an issue, but the State and Local Government are too greedy.

Guest said:

I don't see why amazon feels they are tax exempt. They sell, profit and market to the french market, they think they are special and get a free ride?

PinothyJ said:

I'm taxed by the State on the money I earn. It's double dipping to tax me again on the same money when I spend. Of course consumers will look elsewhere to spend their money. Simplifying the tax laws for state and local cities would fix such an issue, but the State and Local Government are too greedy.

No it is not. The money that YOU spend is money that SOMEONE ELSE is earning. This is no different if it is to a multinational company or that lovely Polynesian woman at the Farmer's Market.

Do not be so ignorant: taxes are the reason you do not live in a third world country...

wiyosaya said:

Since France is going after Google in a similar manner, perhaps this is a case of a government wanting a bail-out.

seefizzle said:

The products aren't being made in France. The companies you buy the products from aren't based in France. There is no physical store that's ringing up an order or anything like that based anywhere on French soil. I don't see how they think they should be able to tax these transactions.

And it's not like they're not collecting any taxes. These goods have to be shipped right? I'm sure they tax all forms of shippin; air, sea, ground...

If the company isn't based in France, how can they charge taxes to that company?

And what really bites me in the @ss, is that it's not an attack on the company itself, it's a tax on US. We're the ones buying the products. That cost will simply be shifted onto the consumer.

I think that online purchases should not be taxed. We are taxed to the balls at every turn in our lives, leave our internet purchases alone.

Tanstar said:

I don't see why amazon feels they are tax exempt. They sell, profit and market to the french market, they think they are special and get a free ride?

Because they are paying the local taxes where they've set up shop. The fact that French citizens are choosing to buy from them shouldn't mean that Amazon (not in France) should owe France money. The French government has no money so they are trying to dig it up anywhere they can. Not sure how France thinks they can enforce this. Are they going to invade Luxembourg so they can force Amazon to pay these phantom taxes?

Tygerstrike said:

Actually wouldnt it be the purchaser who would owe the French Govt the taxes? As I understand it France has a 21% sales tax. If Amazon is paying thier fair share of taxes to the country that they work out of, then it falls on the French consumers to pay for that tax. Its not a very nice idea when you get down to it, but everyone in a civilized country has to pay SOME form of tax. Im guessing that once this goes through the legal process, Amazon and Google will not have to pay this tax due to already paying it in the country that thier business/shipping is going out of. Sounds like the French just want some quick cash and the internet sellers are a somewhat easy mark.

@Tanstar

If I were a betting man I would guess that France would stop all shipments with a Google or Amazon label on it. It wouldnt be unheard of to see the French do it.

Guest said:

Have no fear Amazon. Sooner or later the French will surrender!

Tanstar said:

@Tanstar

If I were a betting man I would guess that France would stop all shipments with a Google or Amazon label on it. It wouldnt be unheard of to see the French do it.

If the French people let their government do that then I guess they deserve what they get.

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