EU Commission to investigate Amazon’s Luxembourg tax deal

Oliver Smith
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ONLINE retailer Amazon could be dragged into the European Commission’s investigation into US multinational businesses with so-called sweetheart tax deals with national governments.

The European competition authority launched its probe into the tax arrangements of these companies following the revelation that US companies were basing their taxable operations in Ireland for preferential tax arrangements.

Last year Amazon channeled €11.9bn through its Luxembourg offices, and paid only £2.4m in UK corporation tax.

It was revealed last week that the Commission has launched a preliminary inquiry into the practices of Luxembourg, the Netherlands and Ireland, asking the countries to reveal details of deals made with foreign companies.

The Commission is looking into so-called advanced pricing agreements, where European countries offer deals to companies over how their taxes will be handled if they decide to base operations in the countries.

Under EU law countries are allowed to set their own corporation tax rates, but must offer equal treatment to all companies.