THE EUROPEAN COMMISSION (EC) has ordered Amazon to re-pay €250m (around £221m) in dodged taxes, having ruled that the firm had been given "illegal benefits" from Luxembourg.
The EC on Wednesday said that, following an in-depth investigation launched in October 2014, it has concluded that a tax ruling issued by Luxembourg in 2003, and extended in 2011, lowered the tax paid by Amazon in Luxembourg "without any valid justification."
This allowed Amazon to shift the "vast majority" of its profits from Amazon EU to Amazon Europe Holding Technologies, which was not subject to tax, the EC said.
Commissioner Margrethe Vestager said in a statement: "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 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."
Amazon will now have to pay back around €250 million, covering the eight years that the tax structure was in place, plus interest.
This hasn't gone down well the firm, naturally, which maintains that it "did not receive any special treatment from Luxembourg."
"We will study the Commission's ruling and consider our legal options, including an appeal," an Amazon spokesperson told INQ. "Our 50,000 employees across Europe remain heads-down focused on serving our customers and the hundreds of thousands of small businesses who work with us."
Meanwhile, Apple has also felt the wrath of the EC's crackdown on tax, with the Commision announcing on Wednesday that it plans to take Ireland to court over its failure to collect €13bn (around £11.3bn) of back taxes from Apple.
This decision comes a year after the EC ordered the US tech giant in August 2016 to pay the unpaid taxes as it ruled the firm had received illegal state aid.
"More than one year after the commission adopted this decision, Ireland has still not recovered the money, also not in part," EU Competition Commissioner Vestager said in a statement.
"We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition." µ
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