Amazon has reportedly paid an unknown amount of money to the government of France in settlement of a long-standing tax dispute with the country. While the value of the settlement remains unknown at the moment, it has been widely reported that tax regulators in France have been demanding the online retail giant to pay around 200 million euros, which translates to $249 million.
It is understood that Amazon’s tax liabilities in France were related to revenues across multiple foreign jurisdictions. France’s tax regulators also concluded that Amazon evaded taxes for the fiscal years 2006 up to 2010. In recent times, the Seattle-based internet giant had faced various tax rows in Europe as well, including a $118 million tax settlement with the government of Italy in December last year. Just like its tax settlement with France, the tax dispute with Italy was resolved in order to halt an investigation of potential back taxes Amazon owed to the European country spanning the majority of last year. It is understood that Italian tax authorities first started suspecting Amazon of not paying the right taxes in early 2017. Tax regulators in Italy estimated that Amazon owed back taxes amounting to €130 million, or $153 million, covering the period from 2011 to 2015. Amazon was then quick to defend itself against the accusations, saying it paid all of its taxes on time, despite the fact that its annual profits upon which the figures were based were historically low due to the huge investments the company made in the country.
In regard to its tax evasion case in France, tax regulators accused Amazon of trying to reduce its tax liability in the country by directing its sales through Luxembourg and taking advantage of the country’s huge tax breaks for foreign companies that choose to build their sites there. This prompted the European Commission to conclude last October that Luxembourg granted Amazon illegal tax benefits which amounted to approximately €250 million, or $294.25 million, following EU’s investigation of Amazon’s tax avoidance practices in the region. According to the findings of EU’s probe, the illegal tax benefits applied to Amazon between 2006 and 2014. Consequently, the EU ordered Luxembourg to collect back taxes owed by Amazon after evading taxes on nearly three quarters of its profits during that period.