Feeds

US taxman joins UK politicoes on hunt for Amazon cash

Who would you be more scared of?

Secure remote control for conventional and virtual desktops

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. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Big Content outs piracy hotbeds: São Paulo, Beijing ... TORONTO?
MPAA calls Canadians a bunch of bootlegging movie thieves
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
Hungary's internet tax cannot be allowed to set a precedent, says EC
More protests planned against giga-tariff for Tuesday evening
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
ISPs handbagged: BLOCK knock-off sites, rules beak
Historic trademark victory, but sunset clause applies to future blocks
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Getting ahead of the compliance curve
Learn about new services that make it easy to discover and manage certificates across the enterprise and how to get ahead of the compliance curve.