October 4, 2017

Amazon Ordered to Pay Nearly $300M For Illegal Tax Advantage

The European Union has ordered that online realtor Amazon pay 250 million euros, or roughly $294 million, to the small nation of Luxembourg for receiving “illegal tax benefits.”

CNBC reported, “Amazon received tax advantages between 2006 and 2014 in the country without any ‘valid justification.'”

Margrethe Vestager, the EU’s commissioner for competition, said in a statement, “Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon’s profits were not taxed.”

According to Vestager, “Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules.”

“This is illegal under EU state aid rules. Member states cannot give selective tax benefits to multinational groups that are not available to others,” Vestager explained in her statement.

Amazon responded to the ruling saying it paid tax in “full accordance with both Luxembourg and international tax law,” and that it does not believe it received any special treatment from Luxembourg.

This decision from the EU comes a year after it “ordered Ireland to recover 13 billion euros in taxes from Apple.”

“The EU has promised to scrutinize tax arrangements between large mulitnationals and the bloc’s member states,” CNBC reported. “The Amazon tax ruling is also set against a push by President Donald Trump to come up with a money repatriation plan for U.S. companies with big cash piles abroad.”

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