“Margrethe Vestager, the EU competition commission, will on Wednesday challenge a 2003 tax ruling underpinning Amazon’s European business that allegedly permitted it to improperly cut European profits by paying intergroup royalties shielded from taxes. Luxembourg and Amazon have long denied any wrongdoing.”
The commission will argue that a 2003 “comfort letter” from Luxembourg’s tax office to Amazon gives the retailer an unfair advantage over competitors, the FT said on 3 October.
Amazon will be told to pay “Luxembourg back taxes worth several hundred million euros,” the paper said.
Over the past several years, Vestager’s office has launched several other inquiries into illegal “state aid” involving multinational tax treatment. These included cases against Apple, Engie, Fiat, McDonald’s and Starbucks.
Amazon employs more than 1,500 staff in the grand duchy.