Amazon wins U.S. tax agency, IRS in tax appeal

Jeff Bezos-Amazon

Global eCommerce giant, Amazon Inc., has won an appeal by the U.S. Internal Revenue Service (IRS).

Amazon said the dispute was a $1.5 billion over its tax treatment of transactions with a Luxembourg subsidiary.

According to a Reuters report, the ruling was given in a 3-0 decision, the 9th U.S. Circuit Court of Appeals in Seattle upheld a 2017 ruling by the U.S. Tax Court related to intangible assets that Amazon.com transferred in 2005 and 2006 to the unit, Amazon Europe Holding Technologies SCS.

Intangible assets include such items as customer lists, intellectual property and software. The appeals court rejected a broader definition sought by the IRS that would have boosted Amazon.com’s tax bill.

The eCommerce giant said it chose Luxembourg for its European headquarters because of its central location, and because it had Europe’s lowest value-added tax rate and a relatively low corporate tax rate.

Amazon had warned its shareholders that it might faces “significant” new tax liabilities if the Tax Court ruling was reversed, or the IRS approach was applied to other tax years.