Tax Court Backs Amazon In $1.5B Transfer Pricing Dispute

By Vidya Kauri (March 23, 2017, 3:52 PM EDT) -- Amazon won a major victory in its $1.5 billion tax dispute with the Internal Revenue Service on Thursday when the U.S. Tax Court ruled that the methods it used to determine payments from its Luxembourg subsidiary for the licensing of intellectual property for online European operations were reasonable.

The dispute centered around a cost-sharing arrangement that Seattle-based Inc. had entered into in 2005, under which its European affiliate, Amazon Europe Holding Technologies SCS, was granted the right to use certain intangible assets in Europe in exchange for an upfront "buy-in payment" and subsequent annual payments for ongoing intangible development costs,...

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