UPDATED 15:04 EDT / FEBRUARY 05 2018

APPS

Amazon settles $250M tax dispute with France, but the fight may not be over

Amid an ongoing antitrust dispute in France, Amazon.com Inc. today settled a separate lawsuit filed by local authorities over unpaid taxes.

The case dates back to 2012, when the French Ministry for the Economy and Finance called on the retail giant to pay €200 million ($250 million) in back taxes on revenue generated from 2006 to 2010. Amazon, like many other tech giants, at the time channeled earnings from the country through Luxembourg.

The retail giant has since set up an office in France so that retail sales may be taxed locally. According to Reuters, however, the French authorities only opened up the possibility of a settlement after Google LLC won a favorable ruling in a similar €1.1 billion tax dispute last year. The government is preparing to challenge the decision.

As for Amazon’s case, neither the company nor the French authorities disclosed the value of the settlement. But it couldn’t have been much higher than the $250 million that the government had originally sought back in 2012.

The agreement comes three months after Amazon reached a settlement to end a €100 million tax lawsuit over in Italy. Meanwhile, in Luxembourg, local authorities are fighting back against an October decision by European competition commissioner Margrethe Vestager that would require the country to charge Amazon €250 million in back taxes.

Apple Inc. also found itself in Vestager’s sights last year. In December, the iPhone maker agreed to pay a hefty $16 billion in back taxes to Ireland following an order from the European Union.

The sums that Amazon has had to pay back so far are fairly small in comparison, but that may change. France and Germany are reportedly leading a push to implement a new “equalization” law in the EU that could increase major tech firms’ tax liabilities by orders of magnitude, according to some sources.

Image: Amazon

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