Luxembourg accused of supplying ‘state aid’ to Amazon

Luxembourg provided “state aid” to Amazon through its tax arrangements for the company, the European Commission has said in a preliminary finding. The EC launched an investigation into preferential tax arrangements between Luxembourg and Amazon last year, and in a document made public said that its “preliminary view is that the tax ruling . . . by Luxembourg in favour of Amazon constitutes state aid . . .and the Commission has doubts at this stage as to that ruling’s compatibility with the internal market”. But in a statement Amazon said: “Amazon has received no special tax treatment from Luxembourg—we are subject to the same tax laws as other companies operating here.” The finding by the European Commission refers to a tax ruling made in a letter on 6th November 2003 from Luxembourg tax authorities to Amazon, which meant Amazon EU Sarl, the head office of Amazon for Europe, could minimise how its profits were exposed to tax by paying royalties to Amazon Europe Technologies Holding SCS (Lux SCS) under a licensing agreement. When the European Commission announced its investigations into the tax arrangements, it said: “Based on a methodology set by the tax ruling, Amazon EU Sàrl pays a tax deductible royalty to a limited liability partnership established in Luxembourg but which is not subject to corporate taxation in Luxembourg. As a result, most European profits of Amazon are recorded in Luxembourg but are not taxed in Luxembourg.” read more Source: The Bookseller

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