Amazon Receives $252M Back Tax Claim

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France seems to think Amazon owes $252 million in back taxes, interest and penalties. The retail giant thinks otherwise and says it will "vigorously contest" this. Is there any other way to contest a $250+ million tax claim? ;)

Amazon said it would fight the tax claim, in court if necessary, and that the demand related to the calendar years 2006 through 2010. "We disagree with the proposed assessment and intend to vigorously contest it," the company said in its third quarter results filed last month. An Amazon official referred to the tax demand, which had not been previously widely reported, at a UK parliamentary committee hearing.
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Seriously? Let's keep in mind, France is the country stupid enough to try to charge an income tax of something like 70% :D

Or as I like to call it, the "Hey, anyone that knows how to make a decent paycheck - continue using your skills and leave the country or find loopholes" :rolleyes: There is a reason why people hide their money in swiss banks, etc.. They didn't get their money being stupid.
 
Nice to see someone is willing to step up and make companies accountable for using tax loopholes to avoid payment. Now if only the US and Canada had the balls to do the same.
 
LordCalin said:
Nice to see someone is willing to step up and make companies accountable for using tax loopholes to avoid payment. Now if only the US and Canada had the balls to do the same.
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loopholes.... are legal... hence, loophole... :rolleyes:
 
Cyraxx said:
loopholes.... are legal... hence, loophole... :rolleyes:
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He never mentioned illegal.

And the word "loophole" implies a negative connotation, particularly when dealing with tax breaks and multi-billion dollar corporations.

France does have exorbitantly high tax rates but they also have the right to clamp down on loopholes as they see fit. And he's right in that the US and Canada need to do the same. It's one thing to get tax breaks for creating jobs in said country, it's quite another to do so via tax loopholes in order to please investors.
 
Cyraxx said:
loopholes.... are legal... hence, loophole... :rolleyes:
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They are legal if applied correctly. They are still legal if applied in a manner that still technically fits to the letter, if not the spirit of the law. They are illegal if they are being abused or do not fit the requirements, or applied in a manner that does not fit the writing of the law.
 
Cyraxx said:
Seriously? Let's keep in mind, France is the country stupid enough to try to charge an income tax of something like 70% :D

Or as I like to call it, the "Hey, anyone that knows how to make a decent paycheck - continue using your skills and leave the country or find loopholes" :rolleyes: There is a reason why people hide their money in swiss banks, etc.. They didn't get their money being stupid.
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Ah, isn't Socialism wonderful? :rolleyes: A little look at what we have to look forward to in the US. :mad:
 
LordCalin said:
Nice to see someone is willing to step up and make companies accountable for using tax loopholes to avoid payment. Now if only the US and Canada had the balls to do the same.
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quite obviously someone who already pays taxes by law in their state folks!
 
mynamehere said:
Ah, isn't Socialism wonderful? :rolleyes: A little look at what we have to look forward to in the US. :mad:
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I understand the shrinking middle class is an issue, however the answer isn't pointing to the people that do have money and say "Hey, you! Over there! You need to toss in more than everyone else!" As I said, you might as well point to them and say "Get out of country, outsource more, and find more ways to use your intelligence".
 
Cyraxx said:
loopholes.... are legal... hence, loophole... :rolleyes:
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Assuming it's in fact a loophole that's exploited, and not their interpretation of it. Califoria bitch slapped Amazon by saying "you have a physical presence" and had that extend to any aspect of their business, not just the warehouse aspect.

But lets not this thread devolve into another "I don't want to pay sales tax because the government should spend less" thread.
 
Cyraxx said:
I understand the shrinking middle class is an issue, however the answer isn't pointing to the people that do have money and say "Hey, you! Over there! You need to toss in more than everyone else!" As I said, you might as well point to them and say "Get out of country, outsource more, and find more ways to use your intelligence".
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Incentive for tax breaks shouldn't amount to which lawyers you hire and which sly economics major can help you funnel money through the Bahamas. It's a problem on both ends: the governments, namely ours, don't provide incentive for enough tax breaks, and on the other end there isn't enough clamping down on loopholes.

I'm pretty sure everyone would be quite content with a zero % tax rate if the company hires a huge number of workers in a country/state, but aside from that do you really need any other "incentives"? At least for employment tax breaks everyone benefits, but for everything else? I highly doubt that...

There's something seriously wrong with the system when I'm paying more taxes than a multi-billion dollar corporation.
 
I think it's fair that France is asking Amazon to pay taxes, but I don't think Amazon should have to go pay back taxes simply because France didn't make it clear that was expected. It doesn't surprise me France is doing this though...that country is all sorts of wrong.
 
pelo said:
There's something seriously wrong with the system when I'm paying more taxes than a multi-billion dollar corporation.
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You're not paying more taxes than a multi-billion dollar corporation.
 
sfsuphysics said:
Assuming it's in fact a loophole that's exploited, and not their interpretation of it. Califoria bitch slapped Amazon by saying "you have a physical presence" and had that extend to any aspect of their business, not just the warehouse aspect.

But lets not this thread devolve into another "I don't want to pay sales tax because the government should spend less" thread.
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California didn't bitch slap anyone. Amazon agreed to create jobs there and collect sales tax for them if they amend their sales tax laws.

Tax laws are often terribly written, full of holes and inconsistent. Amazon said they were too much of a mess to put up with, and the way the law was written, they legally didn't have to.

Same is happening in France. Amazon operated within the letter of the law and used Luxembourg as a western European base of operations. France wants retroactive tax payments and penalties based on new laws and oversight.
 
Last year, Citizens for Tax Justice found that 30 major corporations had made billions of dollars in profits while paying no federal income tax between 2008 and 2010. Today, CTJ updated that report to reflect the 2011 tax bill of those 30 companies, and 26 of them have still managed to pay absolutely nothing over that four year period:
– 26 of the 30 companies continued to enjoy negative federal income tax rates. That means they still made more money after tax than before tax over the four years!
– Of the remaining four companies, three paid four year effective tax rates of less than 4 percent
(specifically, 0.2%, 2.0% and 3.8%). One company paid a 2008-11 tax rate of 10.9 percent.
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Though there's the popular rumor that GE paid no taxes last calendar year, they haven't released their forms publicly and stated that they have paid taxes, and federal income taxes at that, but the number is likely to be quite low.

Like I said, I'd be completely okay with it so long as those tax breaks come with employment, but that hasn't been the case.
 
There's a simple solution, really. Withdraw all business from France. You don't want to pay taxes in France? Don't do business in France. How are they going to claim the taxes if you never enter their country?

As some folks are fond of saying, "Come at me bro."
 
LOOPHOLE:- people forget to account certain facts while making rules. smarter people figured it out to use it in their own favor.
 
Cyraxx said:
I understand the shrinking middle class is an issue, however the answer isn't pointing to the people that do have money and say "Hey, you! Over there! You need to toss in more than everyone else!" As I said, you might as well point to them and say "Get out of country, outsource more, and find more ways to use your intelligence".
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Something the class warefare types don't understand. The more the government grows/regulates, then bigger the gap will grow between the rich & poor. The rich have options, the poor and middle class don't.
 
DarwinPrime said:
There's a simple solution, really. Withdraw all business from France. You don't want to pay taxes in France? Don't do business in France. How are they going to claim the taxes if you never enter their country?

As some folks are fond of saying, "Come at me bro."
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The problem is that they change the rules, sometimes retroactively.
It's like getting a speeding ticket in the mail because they decided to lower the speed limit 2 weeks after you drove through the town at what was then the posted speed.
 
France is a socialist-nightmare, and despite being a modern industrialized nation with plenty of natural resources and infrastructure they just can't afford the nanny-state.

So they are going bankrupt and resorting to suing all foreign mega corporations, and you'll notice a complete lack of any attention paid to the struggling domestic industries.

Its sad, but companies keep letting them get away with it, because the alternative is losing the entire French market (seventy million or so people) to competitors.
 
I think this is simply part of a larger trend where European governments look upon American companies as easy money for the taking.

Just look at the Microsoft case and all the double-standards, huge fines, etc. I guarantee it would have played out differently if Microsoft was a European company.
 
GotNoRice said:
I think this is simply part of a larger trend where European governments look upon American companies as easy money for the taking.

Just look at the Microsoft case and all the double-standards, huge fines, etc. I guarantee it would have played out differently if Microsoft was a European company.
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In fairness, the Microsoft anti-monopolistic fines in the EU have to do with the former monopolistic practices of MS with their browser wars and Netscape's fate as a result. That's why it's forcing MS to bundle a competing browser in their OS instead of just IE. We all love what Bill Gates has done with respect to his philanthropic endeavors, but we here have also been around long enough to remember him as an asshole who was Jobs-like in preventing competition at any and all costs.
 
pelo said:
In fairness, the Microsoft anti-monopolistic fines in the EU have to do with the former monopolistic practices of MS with their browser wars and Netscape's fate as a result. That's why it's forcing MS to bundle a competing browser in their OS instead of just IE. We all love what Bill Gates has done with respect to his philanthropic endeavors, but we here have also been around long enough to remember him as an asshole who was Jobs-like in preventing competition at any and all costs.
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Irrelevant to current cases, and specifically, this case. What Microsoft was up to in the mid 90's has been atoned for.

As far as this case with Amazon is concerned; the French are just mad everyone now knows their tax system is as messed up as ours in the US.
 
pelo said:
He never mentioned illegal.

And the word "loophole" implies a negative connotation, particularly when dealing with tax breaks and multi-billion dollar corporations.

France does have exorbitantly high tax rates but they also have the right to clamp down on loopholes as they see fit. And he's right in that the US and Canada need to do the same. It's one thing to get tax breaks for creating jobs in said country, it's quite another to do so via tax loopholes in order to please investors.
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And Amazon has a right to pull out of a country with confiscatory taxes.
 
LeninGHOLA said:
Irrelevant to current cases, and specifically, this case. What Microsoft was up to in the mid 90's has been atoned for.

As far as this case with Amazon is concerned; the French are just mad everyone now knows their tax system is as messed up as ours in the US.
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The EU case has to do with browsers.
BRUSSELS — European regulators on Wednesday charged Microsoft with an antitrust violation for failing to live up to a prior agreement to give users of its Windows software equal access to rival Internet browsers.
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http://www.nytimes.com/2012/10/25/t...fficials-charge-microsoft-with-violation.html

Antitrust case regarding choice of browsers packaged with the OS. MS didn't bundle competing browsers on their OSes after they were warned by the EU. That has everything to do with MS's past monopolistic behaviors, including its' past Netscape history.

But, yes, the French aren't doing themselves any favors here.
 
fdiaz78 said:
And Amazon has a right to pull out of a country with confiscatory taxes.
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Absolutely, but at the same time a country has a right to ask for whatever it wants. If it means Amazon pulls out of France entirely then that's a consequence that Amazon and France would have to deal with.
 
pelo said:
We all love what Bill Gates has done with respect to his philanthropic endeavors, but we here have also been around long enough to remember him as an asshole who was Jobs-like in preventing competition at any and all costs.
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I never recall being prevented from installing another browser under windows. I don't feel that I need alternative browsers to be served to me on a silver platter in order for things to be "fair". Some of us have also "been around long enough" to remember how netscape stagnated for years at version 4 and how terrible version 6 was. Part of the reason Internet Explorer had a monopoly, is because prior to Firefox years went by where it was the only browser that didn't completely suck... And I still think it would have played out totally differently if Microsoft had been a European company.
 
pelo said:
The EU case has to do with browsers.


http://www.nytimes.com/2012/10/25/t...fficials-charge-microsoft-with-violation.html

Antitrust case regarding choice of browsers packaged with the OS. MS didn't bundle competing browsers on their OSes after they were warned by the EU. That has everything to do with MS's past monopolistic behaviors, including its' past Netscape history.

But, yes, the French aren't doing themselves any favors here.
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I would disagree with your (or the EU's) entire argument in the browser case. It's abusively punitive and arbitrary.

Netscape also didn't do themselves any favors by being terrible.
 
GotNoRice said:
I never recall being prevented from installing another browser under windows. I don't feel that I need alternative browsers to be served to me on a silver platter in order for things to be "fair". Some of us have also "been around long enough" to remember how netscape stagnated for years at version 4 and how terrible version 6 was. Part of the reason Internet Explorer had a monopoly, is because prior to Firefox years went by where it was the only browser that didn't completely suck... And I still think it would have played out totally differently if Microsoft had been a European company.
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For a while it was the better browser without a shadow of a doubt, but because your average user had no idea how to install it or what it was, they used the bundled IE. It's the same reason today that so many people use outdated IE browsers (6 and 7) that aren't secure and Microsoft is attempting to push them to newer updated versions of the browser. At least nowadays people are aware of Chrome and Firefox (and Safari) but back then that wasn't the case. The EU is attempting to avoid that issue by mandating MS ships a competing browser with their OSes sold to customers.

I'm not arguing that it's a good thing or bad, I'm just reminding some of you that this isn't MS's first run in with the EU and monopolistic practices...
 
LeninGHOLA said:
I would disagree with your (or the EU's) entire argument in the browser case. It's abusively punitive and arbitrary.

Netscape also didn't do themselves any favors by being terrible.
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It's not my argument, it's the EUs. I'm just explaining it to you.

Just because somebody posts something you disagree with by shedding light on why it's panning out the way it is doesn't mean they have a horse in this race :p
 
Please , we all know this will drag through the courts in France for years. Ending in some fraction of what was originally claimed. Small enough that Amazon will laugh it off and continue to do business in the country.

France is desperate so subsidize its failing economy with any kind of forced action it can take on soft targets like big corporations. Being a nanny-state will bury them further into debt. There is a reason why nanny-states can't survive as such without destroying the infrastructure or crippling debt.
 
pelo said:
In fairness, the Microsoft anti-monopolistic fines in the EU have to do with the former monopolistic practices of MS with their browser wars and Netscape's fate as a result. That's why it's forcing MS to bundle a competing browser in their OS instead of just IE. We all love what Bill Gates has done with respect to his philanthropic endeavors, but we here have also been around long enough to remember him as an asshole who was Jobs-like in preventing competition at any and all costs.
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You are SO full of shit. Bill Gates was a complete asshole... What with his foundation for charity amounting to record numbers. Thats nothing.

Steve Jobs on the other hand was an idealistic model for what every man should be. Pocketing all money for myself, never donating any - but revolutionize the concepts of other people's inventions. Then dying of cancer. Nope, no karma there.
 
Cyraxx said:
You are SO full of shit. Bill Gates was a complete asshole... What with his foundation for charity amounting to record numbers. Thats nothing.

Steve Jobs on the other hand was an idealistic model for what every man should be. Pocketing all money for myself, never donating any - but revolutionize the concepts of other people's inventions. Then dying of cancer. Nope, no karma there.
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7.7 years and you've already forgotten? Perhaps you were never aware in the first place.

http://en.wikipedia.org/wiki/United_States_v._Microsoft

Judge Jackson issued his findings of fact[13] on November 5, 1999, which stated that Microsoft's dominance of the x86 based personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to that monopoly, including Apple, Java, Netscape, Lotus Notes, RealNetworks, Linux, and others. Judgment was split in two parts. On April 3, 2000, he issued his conclusions of law, according to which Microsoft had committed monopolization, attempted monopolization, and tying in violation of Sections 1 and 2 of the Sherman Act. Microsoft immediately appealed the decision.[14] On 2000-06-07, the court orders a breakup of Microsoft as its remedy. According to that judgment, Microsoft would have to be broken into two separate units, one to produce the operating system, and one to produce other software components.[14][15]
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Bill Gates was a massive asshole as a businessman but he's also the world's biggest philanthropist. Don't forget he got the money for his philanthropic endeavors by being the world's most ruthless businessman, as it didn't fall out of the sky. Jobs was also a ruthless businessman, but unlike Gates he never donated a single red cent to charity. My point wasn't that one of them is a better character than the other (that much should be obvious), but rather that Gates was head of MS when they were absolutely a monopoly and that people are more than willing to forget just how he made his money in the first place.
 
Hmmm pay a quarter BILLION dollars just to continue doing business?

Just like all greedy assholes - France is going to shoot themselves in the foot when it comes to this. I don't know how big amazon is in France, but you have to learn how to give and take when it comes to things like this.

If Amazon is creating thousands of jobs, and the french people are getting what they need at a fair price, go ahead and pull the plug on all that and see how the people react. Just because the french government isn't getting as big of the pie as they'd like, tough god damn shit.

Not only will jobs be lost, but other industries will fall as well. The delivery business, courier, all that jazz will fall if there is any major amazon volume that's pulled.

It doesn't matter what country or government you are in -- if you tax the hell out of business just to make a quick buck it's no different than some gang of thugs roughing up some guy for protection money just because he happens to run a successful bakery.

Any smart government would tread very carefully if tons of jobs were on the line. Piss off the wrong person and not only do you lose all the business, but you also get no portion of ANY tax money. On top of that all french people would lose out on a great online merchant.
 
Anyone else picture something like this happening in the French Government?

Lawmaker 1 - We cant afford out socialist ways, and cant raise taxes any farther, what do we do?
Lawmaker 2 - I know! we will sue a large American business for taxes that it doesn't actually owe!
Lawmaker 1 - Brilliant!
 
Well, I guess we'll just take our millions of Dongs elsewhere
 
Cyraxx said:
I understand the shrinking middle class is an issue, however the answer isn't pointing to the people that do have money and say "Hey, you! Over there! You need to toss in more than everyone else!" As I said, you might as well point to them and say "Get out of country, outsource more, and find more ways to use your intelligence".
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Not sure that is what people are saying. If you notice Mitt Romney's taxes have gone from ~20% to less then 10 percent in about 10-12 years. Is asking someone to pay the same rate that everyone else pays really unfair?

I understand the theory that everyone will leave the US market if they had to pay 20%, but they paid 20% before and made tons of money here, why would they leave. We are still a pretty large market surely someone will figure out how to make money when those who think paying 20% is unfair all leave to...
 
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