EU orders Amazon to pay nearly $300M in back taxes

EU orders Amazon to pay nearly $300M in back taxes
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The European Union is ordering Amazon to pay 250 million euros, or $294 million, in back taxes, saying that the company had been given improper tax breaks.

"Luxembourg gave illegal tax benefits to Amazon,” Margrethe Vestager, the EU’s competition chief, said in a statement Wednesday. “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.”

The European Commission, the EU’s enforcement branch, concluded after a three-year investigation that Luxembourg had allowed Amazon in 2003 to shift assets from a subsidiary that’s subject to taxation to another that’s not.

The EU prohibits member states from offering tax benefits to certain corporations that are not available to others.

In a statement, Amazon denied that it had received “special treatment” from Luxembourg and insisted that it had followed the law.

“We will study the Commission's ruling and consider our legal options, including an appeal,” an Amazon spokesperson said. “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.”

Last year, the EU issued a similar ruling when it ordered Apple to pay about $15.3 billion in back taxes to Ireland, which authorities said had been giving Apple illegal tax breaks. The Amazon fine comes on the same day that the commission referred Ireland to court for failing to collect those back taxes.