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“We have reached an overall settlement agreement with the French authorities on past questions,” an Amazon France spokeswoman said in an email to Reuters. Amazon has in the past been criticised for minimising its tax bill in France and other European countries by channeling sales through Luxembourg, which offers tax breaks to foreign companies which base themselves there. It said that it had set up a branch in France in 2015 and now booked retail sales, charges and profits in the country.
The French government has opened the door to negotiating settlements in long-running tax cases after it lost a court case against Google last July. A French court ruled that Google was not liable to pay 1.1 billion euros in back taxes demanded by the French authorities as the company did not have sufficient taxable presence in France. Since then the French government has also been pushing hard at the EU level for new rules to tax online companies based on their revenues, rather than only on their profits at present.
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Such companies are often taxed on profits booked by subsidiaries in low-tax countries like Ireland or Luxembourg, even though the bulk of their sales comes from other EU countries. Separately, EU competition regulators told Luxembourg in October to recover about 250 million euros in back taxes from Amazon, accusing the country of giving illegal tax benefits. Luxembourg has lodged a legal challenge against the move.
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