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January 16, 2015

Amazon’s Luxembourg tax deal constitutes ‘state aid’ says EC

Amazon denies the claims that they were given illegal tax breaks by Luxembourg.

By Amy-Jo Crowley

Amazon has denied investigation claims that Luxembourg gave them illegal tax breaks.

The European Commission today published findings of a preliminary investigation, detailing suspicions about Amazon’s tax deal with Luxembourg in 2003.

The investigation, launched in October 2014, found that the arrangement could grant a competitive advantage to Amazon, thereby breaking EU rules that are designed to protect customers.

"The Commission’s preliminary view is that the tax ruling of 5 November 2003 by Luxembourg in favour of Amazon constitutes state aid… and the Commission has doubts at this stage as to that ruling’s compatibility with the internal market," the 23-page document stated.

"The commission is of the opinion that through the contested tax ruling the Luxembourgish authorities confer an advantage on Amazon."

"That advantage is obtained every year and on-going, when the annual tax liability is agreed upon by the tax authorities in view of that ruling."

Amazon has reportedly denied the claims, saying it "has received no special tax treatment from Luxembourg".

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"We are subject to the same tax laws as other companies operating here," the online retail giant said in a statement.

The EU has also launched similar investigations into Apple’s deals with Ireland and Starbuck’s deal with the Netherlands.

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