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