As is well known, Amazon has been playing a game in the UK and many European countries in which it claims to have no permanent\u00a0establishment\u00a0for tax purposes in these countries, all sales being billed from Luxembourg with the substantial local operations just being\u00a0treated\u00a0as sales fulfilment functions.<\/p>\n
I've\u00a0had\u00a0it drawn to my\u00a0attention\u00a0that this\u00a0arrangement\u00a0was also\u00a0tried\u00a0in Japan and was challenged in 2009. This was the Reuters report at that time<\/a>:<\/p>\n Japanese tax authorities have told an affiliated company of\u00a0Amazon.com\u00a0to pay some $119 million in taxes for unreported income in\u00a0Japanover three years to the end of 2005, the Asahi newspaper reported on Sunday.<\/p>\n But the company said the taxation was inappropriate and asked tax authorities in the United States and\u00a0Japan\u00a0to discuss whether the firm properly complied with the tax code in the bilateral tax treaty, the newspaper added.<\/p>\n The affiliated company in Seattle,\u00a0Amazon.com\u00a0International Sales, has commissioned Amazon Japan and Amazon Japan Logistics to manage sales and\u00a0logistic\u00a0operations in Japan, while booking sales from itsbusiness\u00a0in Japan back in the United States where it paid taxes, Asahi said.<\/p>\n But the Tokyo Regional Taxation Bureau has judged that Amazon's operations in Japan should be considered as having a 'permanent establishment (PE)', meaning their income should be taxed in Japan under the U.S.-Japan tax treaty, it added.<\/p>\n Officials from Amazon Japan were not immediately available for comments.<\/p><\/blockquote>\n There were a number of similar reports at the time, but since then the trail seems to have gone cold.<\/p>\n