France Makes $252 Million Back Tax Claim Against Amazon

Oddly the biggest book world news to come out of a U.K. parliamentary hearing yesterday had to do with France. At the contentious hearing, an Amazon executive confirmed that France is making a back tax claim of $252 million against Amazon, Reuters reported.

The French back tax claim stems from Amazon's tax strategy of reporting all sales in Europe through its subsidiary in Luxembourg, which taxes profits at 11%, "less than half the average corporate income tax rate in its major markets," Reuters said. The claim is for the years 2006-2010 and includes interest and penalties.

The hearing was conducted by the House of Commons' Public Accounts Committee, which grilled executives from Amazon, Starbucks and Google about tax avoidance in the U.K. by the companies.

Consistent with its usual approach and in contrast to Starbucks and Google, Amazon did not reveal much information about its operations. Andrew Cecil, Amazon's director of public policy, "repeatedly said that he would have to come back at a later date with information requested by the committee," the BBC reported. That information included the amount of Amazon sales in the U.K., pre-tax profits of Amazon's European company and the ownership structure of that company.

Reuters quoted committee chair Margaret Hodge as saying: "It's just not acceptable. It's outrageous."

According to the BBC, Cecil said sales on all Amazon European websites were considered sales by the company in Luxembourg, and its U.K. business, "which employs about 15,000 people to manage deliveries, warehousing and other aspects of the U.K. business, operates as a service provider to the European company."

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