KYODO NEWS - Dec 22, 2019 - 21:41 | All, Japan

Amazon.com Inc. paid nearly 30 billion yen ($274 million) in corporate taxes in Japan over the last two years after changing its policy to book sales in the country, sources with knowledge of the matter said Sunday.

A Japan unit of Amazon used to be running a business by receiving outsourcing fees from its parent in the United States, basically not involving in making contracts with its business partners in the Asian country, thereby avoiding higher tax bills, the sources said.

But Amazon Japan G.K., which does not disclose its earnings figures, started making contracts on its own after it was formed by merging the U.S. retailer's logistics and sales units in Japan in May 2016, according to the sources.

The main purpose was to expand operations and seize more business opportunities in Japan, the sources said. Having the Japan unit become the main body for signing contracts will make it possible for Amazon to tap into highly regulated sectors, such as medical products.

In both 2017 and 2018 business years, Amazon paid more than 10 billion yen in corporate taxes in Japan and it is expected to pay even more in 2019 as record sales are expected, the sources said.

Amazon, which started its business in Japan in 2000, and other major digital companies have come under scrutiny for the way they deal with their tax bills as they operate globally and can often choose to report sales in low-tax jurisdictions.

In a related development, there have been active discussions on digital taxation in many countries and at an international level, although the United States, which is home to a large majority of tech giants, is opposed to the new idea.

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