Market Overview

Amazon Pays 13 Times More In Taxes With Hopes To Expand Business In Japan

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Amazon Pays 13 Times More In Taxes With Hopes To Expand Business In Japan

Seattle-based e-commerce giant Amazon.com Inc. (NASDAQ: AMZN) paid more 13 times more in taxes in 2017 and 2018 in Japan than it did in 2014, the Nikkei reported on Monday.

What Happened

Amazon's Japanese subsidiaries paid approximately $137.4 million (15 billion yen) in taxes both in 2017 and 2018, 1363.64% more than in 2014 when the subsidiaries paid about $10 million in taxes together, the Nikkei noted.

The rise in taxes came as Amazon is increasing operations in the country and trying to capture the local market. Up until 2016, the e-commerce giant primarily relied on running the operations under the US-based parent company, without partnering with local businesses, allowing it to avoid high taxes.

What's Next

Taking the contracts through the local subsidiary, while increasing the company's share of taxes, will give it access to highly regulated sectors like medical products, an earlier report by Tokyo-based Kyodo News noted.

Amazon's total taxes paid in 2019 are expected to be further up than the ones in previous years, according to Kyodo News.

Silicon Valley behemoths like Google parent company Alphabet Inc. (NASDAQ: GOOGL) and social media company Facebook Inc. (NASDAQ: FB) have made similar moves to pay taxes locally over the last few years, amid rising criticism over tax avoidance by companies running their businesses digitally.

While other countries seek to streamline and increase taxes over digital services, the U.S. government has largely resisted such attempts.

Price Action

Amazon's shares closed 0.055% higher at $1,869.80 on Friday.

Posted-In: Amazon FacebookNews Politics Global Tech Media General Best of Benzinga

 

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