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Amazon Ordered To Pay $119 Million In Taxes To Japan

Branch offices at issue

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[ Technology]

Japan’s tax authorities have ordered an affiliate of Amazon.com to pay $119 million in back taxes for unreported income earned it the country during a three year span that ended in 2005.

U.S. companies that do business in Japan without branch offices are not required to file tax returns or pay taxes to the Japanese government.

Jeff Bezos
Jeff Bezos

The Tokyo Regional Taxation Bureau says that two Japanese subsidiaries of Amazon have served as branch offices of the affiliate, Amazon.com International Sales.

The two subsidiaries, Amazon Japan Logistics K.K. and Amazon Japan K. K. are commissioned to carry out merchandise distribution and other functions.

Unhappy with the order, Amazon has asked tax authorities in Japan and the United States to discuss the matter due to a bilateral tax treaty.

Amazon announced in its annual report for the 2008 business year that it had been ordered by Japanese tax officials to pay back taxes.

Amazon.com International Sales is responsible for operations outside the United States. The company has booked sales posted in Japan as those of the company while paying taxes only in the U.S.
 

Amazon Ordered To Pay $119 Million In Taxes To Japan
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  • http://www.abundantace.com/ ace

    These corporations need to be cracked down upon. They get away with too many things. Especially when it comes to “tax breaks”.

    • Doc

      Ace-

      While I agree that often, corporations get away with more than the law should allow, I have to say that it’s not always the case. Let’s not jump to the conclusion that they’re guilty, just because they’re a big corporation.

      Japanese trade laws are fairly complex, reflecting their effort to protect Japanese company from unfair competition, without stifling that competition. A precarious balance, and one that I think they’ve managed to orchestrate pretty well.

      That said, based on the little information in this blurb, it sounds to me as though Amazon stepped in it, and got caught. They essentially DO have branch offices, and they posted a profit from Japanese sales.

      Looks to me like they owe some taxes to the Land of the Rising Sun!

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