Transfer Pricing Alert: Court Delivers Prime Ruling for Amazon

In late March, a U.S. Tax Court ruled in favor of the taxpayer in the case of Amazon, Inc. & Subsidiaries v. Commissioner of Internal Revenue. The court determined that Amazon had undervalued its intangible property (IP) and applied a $1.5 billion adjustment to the taxpayer’s income and that the IRS had inconsistently applied cost sharing regulations.

Some suggest this may result in a precedent for corporations that hold IP abroad and inspire more concrete transfer pricing litigation moving forward. If this is the case, billions of dollars may be at stake for the IRS, should companies in similar situations choose to contest.

For additional background details, contributing factors to the final decision and BDO’s take on the topic, view and download the full alert.

Contact Mike Metz at mmetz@bdo.com for more. And, be sure to keep up with our latest thoughts by subscribing to our blog on the Consumer Business Compass homepage here and following us on Twitter at @BDOConsumer