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Wired News – Amazon Agrees to Pay €100 Million as Settlement of Tax Dispute with Italian Tax Agency

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LONDON, UK / ACCESSWIRE / December 19, 2017 / Active-Investors issued a free report on Amazon.Com, Inc. (NASDAQ: AMZN), which is readily accessible upon registration at www.active-investors.com/registration-sg/?symbol=AMZN as the Company's latest news hit the wire. An official communication from Agenzia delle Entrate, Italy's Tax Agency dated December 15, 2017, disclosed that Amazon.Com has agreed to the Italian Agency's tax assessment and would, therefore, pay €100 million (approximately $118 million) to settle a tax dispute. The tax dispute is with regards to the outstanding taxes payable by Amazon for the years 2011-2015. Amazon owed approximately €130 million in back taxes in Italy for the said period. Sign up now for our free research reports at:

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The Tax Dispute and Settlement

Amazon.com and Italy's Inland Revenue Agency have agreed to the assessment and resolve all potential disputes related to any outstanding taxes payable by the Company. The investigation on the matter was carried out by the Guardia di Finanza (Italian law enforcement agency under the authority of the Minister of Economy and Finance) in coordination with the Milan Public Prosecutor's Office and covered the period from 2011 to 2015. Amazon.com has agreed to pay a total of €100 million which will resolve all pending and potential tax disputes related to the said investigations. The tax settlement covers Amazon.com's Italian divisions - Amazon EU.ar.l and Amazon Italia Services srl. The Italian Tax Agency has drawn an agreement with Amazon.com to ensure that the Company pays the correct taxes in Italy in the future.

Amazon.com had earlier defended its stance and explained that its profits in Italy were much lower in the disputed period as it had made huge investments to build its business and that it had already paid taxes for the said period. According to Amazon.com, it had invested approximately €800 million since it set up its business in Italy in 2010 and has over 3,000 employees.

Internet Companies under scrutiny of Italian Regulators

Earlier Apple and Google have also settled tax disputes with the Italian Tax Agency. Apple had agreed to pay €318 million in December 2015 and in May 2017 Google had agreed to pay €306 million to settle the tax-related disputes for back taxes owed. The Italian Tax Agency has taken a stricter stance on these companies which have avoided paying taxes to the Italian Government for their business operations in Italy. The Italian Tax Agency's contention is that large multinational companies, especially internet companies, with operations across Europe and the world have found a way to avoid paying taxes by channeling their earnings via low-tax havens like Ireland and Bermuda.

Facebook had announced on December 12, 2017, that it is making changes in its tax structure with effect from FY18 so that the company pays taxes in the country where sales actually take place rather than routing its transactions through its Irish subsidiary. Facebook made the changes after coming under tremendous pressure from US and European countries for paying less than actual taxes.

In a bid to have proper tax legislation to cover the tax loopholes, the Italy's Senate Budget Committee in November 2017 approved a proposal to introduce a 6% levy on all digital sales. The tax is nicknamed "web tax" and is expected to come into effect from January 2019 and the country's Finance Ministry is working to define which services will be covered under this tax. The Finance Ministry is expected to come out with the list of services by April 2018. The "web tax" is expected to net €114 million per year to the country's treasury.

Stock Performance Snapshot

December 18, 2017 - At Monday's closing bell, Amazon.Com's stock was marginally up 0.97%, ending the trading session at $1190.58.

Volume traded for the day: 2.94 million shares.

Stock performance in the last month – up 4.69%; previous three-month period – up 22.76%; past twelve-month period – up 57.12%; and year-to-date - up 58.77%

After yesterday's close, Amazon.Com's market cap was at $571.34 billion.

Price to Earnings (P/E) ratio was at 300.50.

The stock is part of the Services sector, categorized under the Catalog & Mail Order Houses industry. This sector was up 0.8% at the end of the session.

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