European Commission orders Amazon to pay €250m in back taxes

The European Commission (EC) has ordered Amazon to pay €250m (A$374m) after finding the company received tax benefits in Luxembourg which were illegal under EU state aid rules, reports the Bookseller.

EC member in charge of competition Margarethe Vestager said Amazon used Luxembourg tax benefits to reduce its tax bill by €250m from May 2006 to June 2014, meaning the company paid no tax on almost three quarters of its profits.

‘Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules,’ said Vestager. ‘This is illegal under EU State aid rules. Member States cannot give selective tax benefits to multinational groups that are not available to others.’

The EC launched an investigation into Amazon’s tax practices in 2014. The report concluded that Luxembourg’s tax ruling had enabled Amazon to shift most of its profits from Amazon EU, a group company that’s taxable in Luxembourg, to Amazon Europe Holding Technologies, an ‘empty shell’ not subject to taxation.

An Amazon spokesperson said it will study the EC’s ruling and consider an appeal. Amazon changed the way it operates in Europe in June 2014.

Category: International news