Amazon slapped with $252m bill from French taxman

The French government is seeking millions of dollars in back taxes from Amazon, it emerged this week.

The French Tax Administration (FTA) is pursing the retailer for $252m for between 2006 and 2010, "relating to the allocation of income between foreign jurisdictions" the online retailer and cloud provider said.

Amazon received the request from the FTA in September, details of which were published in its most recent set of quarterly results. The company is fighting the tax request and may yet call in the lawyers.

"We disagree with the proposed assessment and intend to vigorously contest it. We plan to pursue all available administrative remedies at the FTA, and if we are not able to resolve this matter with the FTA, we plan to pursue judicial remedies," it said.

The news emerged in the same week as Amazon was hauled over the coals over tax in the UK by the Public Accounts Committee over concerns around tax avoidance.

Amazon's businesses in UK and France are operated as service businesses, used by Amazon EU Sarl, which is based in Luxembourg. Amazon EU Sarl made €9.1bn in revenue last year, but only paid €8m in tax in its home country.

The UK and French businesses are paid by the Luxembourg business for operating local fulfilment centres and providing services such as stock picking and packing. However, the sales and staffing levels in those individual countries dwarf those in Luxembourg: according to figures cited by the PAC, there are 500 staff in Luxembourg, compared with 15,000 in the UK, while the UK accounted for £1.2bn of revenue in 2010, compared with Luxembourg's £2.2m.

Amazon is not the only company the French tax authorities are targeting: Google is also facing requests for €1bn extra in taxes for the last four years.