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May 26, 2015

Amazon changes tax practises amid EU probe

The company's new tax practices went in to effect on 1 May.

By CBR Staff Writer

Amazon will start paying taxes in individual European countries and stop channeling all of its sales via its Luxembourg subsidiary, amidst a probe on its tax practices in the continent.

An Amazon representative said the company’s new tax practices went in to effect on 1 May, with local divisions in the UK, Germany, Italy and Spain already recording their own revenue.

The company’s decision comes in the middle of ongoing investigations into the tax practices of Amazon, Apple, and several other US tech firms in Europe.

In October last year, European Union (EU) antitrust regulators launched an investigation into Amazon’s low-tax tax arrangement with Luxembourg.

Earlier this year, EU regulators said the tax arrangement may violate EU rules by allowing Amazon to operate nearly tax-free in Europe, leading to a biased advantage over its competitors.

However, the EU’s antitrust chief Margrethe Vestager said earlier this month that regulators may miss a deadline of June due to a lack of information.

Earlier in 2015, Amazon claimed that it created over 6,000 full-time jobs in the EU last year, after a surge in demand from European customers.

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The Seattle-based retailer currently employs approximately 32,000 people in Europe.

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