Amazon said the French authorities have made a claim for back taxes, interest and penalties in relation to “the allocation of income between foreign jurisdictions” between 2006 and 2010, reports The Irish Times. It intends to fight the claim.
The move against Amazon comes amid growing scrutiny in France and Britain of multinationals that funnel revenue from their operations in both countries through low-tax regimes. France’s tax office is investigating the relationship between Google’s French subsidiary and its European headquarters in Dublin, while executives from Google, Amazon and the coffee chain Starbucks came under intense pressure from MPs in London on Monday.
Amazon minimises its tax bill in France and other European countries by channelling sales through Luxembourg, which offers tax breaks to foreign companies that base themselves there. “We disagree with the proposed assessment and intend to vigorously contest it,” the company said of the $252 million claim in financial results filed in the United States.
Court documents show officials in Paris suspect Google’s French arm of selling advertising to major French clients while declaring revenue from such activities in Ireland, where the corporate tax rate is lower. French police carried out raids on Paris addresses linked to the company last year, and speculation is rife that Google also faces a heavy tax claim.
The investigative newspaper Le Canard Enchaîné reported last month that the authorities were seeking €1 billion from Google, but the company denied this and insisted it complied fully with tax laws in Ireland and France.
Read more of this report from The Irish Times.