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Amazon's Luxembourg tax deals

October 7, 2014

The European Union's competition watchdog has said it's launched an investigation into tax deals struck between Luxembourg and Amazon. The US online retailer is suspected of getting unjustified state aid.

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Amazon parcel
Image: Reuters

EU regulators reported Tuesday they'd opened an in-depth investigation into US online retailer Amazon.

They said they were examining whether the company had complied with EU competition rules, suspecting the firm to have struck tax arrangement deals with Luxembourg to gain an effective subsidy.

The US competition authority argued that Luxembourg's 2003 tax ruling for Amazon's local subsidiary Amazon EU S.A.R.L. allowed the company to pay a royalty to its parent that reduced its taxable profit and might not be in line with the bloc's market stipulations.

In good company

There was no immediate comment on Brussels' move from either Amazon or the government of Luxembourg.

If found guilty of breaching EU rules on state aid, Amazon could be called upon to repay the amount of illegal support it had received.

As early as July, the EU watchdog launched similar probes into Apple and its tax deals with Ireland as well as into Starbucks and Fiat over their tax arrangements in the Netherlands and Luxembourg respectively.

hg/sgb (dpa, Reuters)