The European Commission has demanded that Amazon pays the equivalent of £222 million in back taxes following the three year investigation into Luxembourg’s tax treatment of Amazon EU and Amazon Europe Holding Technologies. In its judgment the European Commission found that the unfair subsidy orchestrated by Luxembourg has enabled Amazon to transfer most of its profits from Amazon EU to Amazon Europe Holding Technologies, an entity which was not subject to tax. Amazon has continued to defend the arrangement and is considering an appeal.
Margrethe Vestager, commissioner, said “Luxembourg gave illegal tax benefits to Amazon. As a result almost three quarters of Amazon’s profits were not taxed. In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same tax rules. This is illegal under EU state aid rules. Member states cannot give selective benefits to multinational groups that are not available to others.”
No mention has been made as to whether Luxembourg will be fined for its part in the matter.
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