Indian tax authority has decided to charge tax on cloud services fees paid by Amazon to the US, a move which will lead to the company coughing up "significant" amount in taxes including payments for some of the previous years, the company said in a regulatory filing.
Without sharing details of the decision, Amazon said it will contest the decision, but it will have to remit a significant amount in taxes unless the matter is resolved.
"In February 2023, we received a decision by the Indian Tax Authority (ITA) that tax applies to cloud services fees paid to the US. We will need to remit taxes on the services in question, including for a portion of prior years, until this matter is resolved, which payments could be significant in the aggregate," the company said.
Amazon claimed that the ITA's decision is without merit.
"We believe the ITA's decision is without merit, we intend to defend our position vigorously, and we expect to recoup taxes paid. If this matter is adversely resolved, we would reflect significant additional tax expense, including for taxes previously paid," Amazon said.