Thu, Oct 05, 2017 - Page 11 News List

Amazon must pay US$295 million in back taxes: EU


The EU has told member state Luxembourg to get US$295 million in back taxes from Inc, Brussels’ latest regulatory move targeting US tech companies accused of tax avoidance.

EU Commissioner for Competition Margrethe Vestager yesterday said that Amazon has unfairly profited from special low-tax conditions since 2003 in the tiny Grand Duchy, where its European headquarters are based.

EU nations have been actively looking to close loopholes for US Internet multinationals and are considering harmonized tax rules.

Amazon said in a statement that it believed it “did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law.”

It added that it would consider appealing after studying the ruling.

Luxembourg also said it might appeal, but stressed that it is “strongly committed to tax transparency and the fight against harmful tax avoidance.”

Criticism over sweetheart deals struck by EU states with big multinationals has increased over the past years, especially as the bloc struggled through a financial crisis over the past decade. It has focused on foreign multinationals being able to get away with huge tax breaks on profits as EU nations competed with each other to lure companies looking for a place to establish their EU headquarters.

Luxembourg offered “illegal tax benefits to Amazon. As a result, almost three quarters of Amazon’s profits were not taxed,” Vestager said.

“In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules,” she said.

The issue was not so much that the companies got tax breaks, but that they were available only to them, Vestager said.

“Member states cannot give selective tax benefits to multinational groups that are not available to others,” she added.

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