EU Orders Amazon To Pay €250m In Back Tax

EU Orders Amazon To Pay €250m In Back Tax

The European Commission (EC) has ordered online retail giant Amazon to pay €250 million in back tax to Luxembourg.

The commission, after investigation, ruled that Amazon had received illegal tax benefits. According to the EC, Amazon received tax breaks between 2006 and 2014.

Amazon, in a statement, rejected the EC’s ruling and may appeal.

“We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law. We will study the commission’s ruling and consider our legal options, including an appeal,” the release said.

Amazon created European operating headquarters Amazon EU Sarl, which pays a royalty to the parent company in Europe for use of intellectual property. But that parent company, a limited liability partnership, is not subject to corporate tax in Luxembourg.

The commission alleged that Amazon was using Luxembourg as its European hub.

This led to Amazon paying €16.5 million in tax on European revenues of €21.6 billion in 2016.

Luxembourg has been implicated in previous tax-related probes involving US technology companies regarding tax affairs and antitrust. The commission is currently reviewing tax deal between McDonald’sand Luxembourg.

The European Commissioner for Competition Margrethe Vestager said the labeled the practice as illegal.