Ama­zon wins IRS suit, avoids pay­ing US$1.5b tax

New Straits Times - - Business -

NEW YORK: Ama­zon.com Inc on Thurs­day won a more than US$1.5 bil­lion (RM6.6 bil­lion) tax dis­pute with the In­ter­nal Rev­enue Ser­vice (IRS) over trans­ac­tions in­volv­ing a Lux­em­bourg unit more than a decade ago.

Ama­zon’s ul­ti­mate tax li­a­bil­ity from the de­ci­sion was not im­me­di­ately clear.

The world’s largest on­line re­tailer has said the case in­volved trans­ac­tions in 2005 and 2006, and could boost its fed­eral tax bill by US$1.5 bil­lion plus in­ter­est.

It also said a loss could add “sig­nif­i­cant” tax li­a­bil­i­ties in later years.

Ama­zon made US$2.37 bil­lion of profit last year, four times what it made in the four prior years com­bined, on rev­enue of US$136 bil­lion.

“The de­ci­sion should shield Ama­zon from po­ten­tially sig­nif­i­cant tax obli­ga­tions to the IRS cov­er­ing years be­yond the ones cov­ered in the suit,” said Colin Se­bas­tian, an an­a­lyst at Baird Equity Re­search.

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