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Amazon’s tax-free European profits drop after IRS clampdown
http://www.thenewstribune.com/2014/04/19/3156320/amazons-tax-free-european-profits.html?sp=/99/261/Amazon’s tax-free European profits drop after IRS clampdown
By TOM BERGIN
Reuters April 19, 2014
LONDON — The amount of money Amazon.com reports through a tax-exempt vehicle in Europe has dropped sharply in the past two years, even as European sales jumped, after the U.S. tax authority tightened rules it felt were being abused to shift profits.
Amazon minimizes its tax bill by having the U.S. unit, which owns its technology licenses, lease the rights to re-license the technology to a tax-exempt partnership based in Luxembourg.
This partnership then resells the software rights to other affiliates for a much higher price, corporate and court filings show.
Such arrangements have drawn fire from politicians on both sides of the Atlantic as well as citizens struggling with higher personal taxes and cutbacks in state services imposed to pay for the financial crisis.
