Amazon is putting another European tax dispute behind it.
A spokeswoman for the e-tail giant said it has “reached an agreement” with tax authorities in France related to “historical matters.” While the spokeswoman declined to give any specifics on the deal, tax authorities in 2012 demanded Amazon pay 200 million euros in back taxes stemming from sales between 2006 to 2010.
The spokeswoman did add that in 2015, Amazon set up a local branch of Amazon in France “with all retail revenues, expenses, profits and taxes due, now accounted for.”
Amazon in December ended a similar case in Italy, agreeing to pay 100 million euros in back taxes to end claims that its local affiliate there avoided 130 million euros in taxes.
At the time, Amazon said it had also in 2015 set up a local “branch” in order to fully account for its financial performance in Italy.
Amazon is, however, still dealing with a dispute over allegedly unpaid tax with the European Commission, the regulatory body of the European Union, which says Amazon owes more than 250 million euros in back taxes.
Led by antitrust commissioner Margrethe Vestager, the commission has been working to ensure that the power and growth of online giants like Google, Facebook and Amazon doesn’t go unchecked and that they operate under the same tax scheme as smaller operators.
At the center of the EU’s case against Amazon is an earlier ruling by a court in Luxembourg that allowed the giant e-tailer to cut its tax liability between 2006 and 2014, which the commission now says created an unfair advantage and crossed aid rules for European Union member states.
Specifically, Luxembourg’s ruling allegedly let Amazon shift profits from one operating affiliate, Amazon EU, to a holding company with no physical presence or employees, Amazon Europe Holding Technologies. By paying the holding company royalties from Amazon sales that exceeded 90 percent of Amazon’s profits in the EU, the company was able to lower its tax liability over eight years. Vestager said Amazon avoided tax on nearly three-quarters of its European profits in this way.
In mid-December, Luxembourg again put itself at the center of the dispute by appealing the commission’s finding, arguing the regulatory body did not show “the existence of a selective advantage” given to Amazon through its operation in Luxembourg.
Taken together, Amazon may be on the hook for about 550 million euros related to allegedly unpaid taxes, but even that number is not enough to put a real dent in the company’s finances.
The company’s tallied sales of more than $60.5 billion and profits of just under $2 billion in the fourth quarter. For the full year, net sales came in at $177.9 billion and profits totaled $3 billion.
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