Amazon Japan seems to be in deep trouble with tax authorities in this country:
Bad news for Amazon over the weekend. The Tokyo Regional Taxation Bureau slapped Amazon’s affiliated unit “Amazon.com International Sales” with a $119 million tax bill. Japanese newspaper Asahi Shimbun reported yesterday [JP], the subsidiary is accused of failing to report income in Japan between 2003 and 2005.
Japanese tax authorities started making these allegations as early as 2007 but now seem ready to pull out the hammer. The way Amazon operated so far is that every time Japanese customers buy something from Amazon’s Japanese website, they legally make contracts of purchase with Amazon offices in the US. The problem for the Japanese taxation bureau: These sales were booked and taxed in the US, even though Amazon operates two companies in Japan, Amazon Japan and Amazon Japan Logistics. (Click here for more background on Amazon’s position in Japan.)
– read the rest in my article on TechCrunch: