Amazon’s tax settlement with Italy

They’ve settled for 100 million euros. None of the reports go into the details of what was alleged and so on. So, anyone know?

Excessive royalties perhaps? Over claiming investment breaks? Not arms length transfer pricing?

I ask because varied will start to insist that this shows dodging – which, obviously it does. But is it dodging that’s been rooted out under the rules they would like, or what is dodging under extant rules?

7 comments on “Amazon’s tax settlement with Italy

  1. The news reports don’t give the reason but I have sent a tweet out to the TaxTweeter community asking if anyone knows:

    Possibilities:

    1) Transfer Pricing;
    2) Disallowed Expenses (i.e. Amazon has spent 800M euros in Italy since establishing there in 2010;
    3) Sales or VAT collection

    I will report when there is further information.

  2. With the Italians, who knows? Could have just been a shakedown, what with the Italian legal systm being such a model of propriety, legal certainty, objectivity, and never being influenced by the government ever and all that…

  3. Regardless of why they have to pay it, its hardly that much is it? Italy’s government budget deficit is c. €40bn, so a one off receipt of €100m isn’t going to make much impact.

  4. the Italian legal systm being such a model of propriety, legal certainty, objectivity

    A major European (global) insurer I worked for, with operations in almost every EU country, refused to touch Italy for personal cover, on the very reasonable grounds that 50% of claims (and 90% of those from south of Naples) were fraudulent. “Let Generali have ’em” summed up their attitude.

  5. “My friends in Verona maintain Africa begins at Naples…”

    They shouldn’t get complacent, its on the march north.

  6. @Theo

    I’m sure the influx from the vibrant community hasn’t helped – but the divide between N & S Italy has been there since unification (and, of course, long before).

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