EU Commission issues Amazon €250m tax bill

The European Commission is pursuing Amazon for money it owes in taxes. Luxembourg has given Amazon illegal tax advantages, according to Margrethe Vestager, the EU Commissioner in charge of competition. She has ruled that Luxembourg’s tax advantages to Amazon mean that they have not paid on just about almost three-quarters of the company’s profits to go untaxed and giving it an illegal advantage over the local competitors. According to Vestager, it is an illegal practice under EU state aid rules. Member states may not grant selective tax concessions to multinational groups to which other companies have no access.

The Commission states that Amazon has benefitted from a tax deal granted by the Luxembourg government that allowed the company to reduce its tax bill by €250m from 2006 to 2014. Amazon has been ordered to pay that sum, plus interest, but has so far refused to comply. They state to have paid tax in full accordance with both Luxembourg and the international tax law.

Besides the Amazon case, the Irish government is accounted for the lack of effort in collecting the correct tax owed in regard to the Apple ruling. Ireland is not amused by being threatened with action in the European Court of Justice for failing to collect 13 billion Euros supposedly owed by Apple.

The irony in the Amazon case is that EU Commission president Jean-Claude Juncker was Luxembourg’s Prime Minister from 1995 up until 2013. During a great deal of that period also served as finance minister too, persisting over the government that made the tax arrangements possible and now heads up the organisation that is condemning the same deals.