Feeds

US taxman joins UK politicoes on hunt for Amazon cash

Who would you be more scared of?

Boost IT visibility and business value

Amazon is fighting the US taxmen over a $234m unpaid bill.

The Internal Revenue Service (IRS) told the online superstore in November that it owed taxes in 2005 and 2006, and also challenging its tax deductions, according to a court filing seen by Reuters.

But Amazon has countered that the IRS is overestimating how much its "intangible assets", such as software and trademarks, are worth, which would also affect tax figure calculations.

The IRS is concerned about the web bazaar's "transfer pricing", which is a neat little tax dance in which corporations buy something the whole company needs in one country and then charges its regional branches to buy it off them, often at a markup.

For example, if Amazon in the US were to buy packing boxes at 50p each and then sell them to Amazon UK at £1 each, that price comes off the UK subsidiary's tax bill as an expense, saving the company as a whole some money. Obviously there has to be some change in the cost since the US is now shipping these boxes to Britain for Amazon UK's use, but in grey areas, companies have been known to make some money.

This kind of legal tax chicanery was the subject of UK politicians' probe into the corporate taxes of Amazon, Google and Starbucks at the end of last year. ®

Maximizing your infrastructure through virtualization

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.