Now the EU is Going After Amazon for Back Taxes [Updated]

By Tom Pritchard on at

[Update]: The EU has ordered Amazon to pay €250 million (£221 million) in back taxes after the EU determined three quarters of the company's taxes had not been taxed. According to European Competition Commissioner Margrethe Vestager Luxembourg had allowed the retailer to pay "substantially less tax" than other businesses. Such deals are illegal under EU law.

Amazon has continued to deny the allegations, saying it did "not receive any special treatment from Luxembourg". A spokesperson also said "[Amazon] will study the Commission's ruling and consider our legal options, including an appeal.

Original story is as follows

So you heard about the situation with Apple and the EU, with the latter fining the tech company €13 billion for allegedly trying to avoid paying taxes (via Ireland). You may have wondered what that means for other big companies that try and get out of paying government money, and it's not good. Not poor from their perspective anyway.

According to the Financial Times, EU competition commissioner Margrethe Vestager is expected to announce a recovery order against Amazon later today. Why? Because of alleged tax agreements with Luxembourg going back to 2003 - a deal that a preliminary hearing referred to as "constituted state aid".

The retail giant is now facing a bill that could cost them hundreds of millions of Euros. This is despite the fact that Amazon insists it hasn't had any preferential treatment from Luxembourg's government, and is subject to the same tax laws as everyone else.

That's the same excuse it used when it was revealed it only paid £7.4 million of tax last year.

It's worth noting that the BBC points out that the European Commission's current president, Jean-Claude Juncker, was Piss-poor minister of Luxembourg when the deal was allegedly struck. The EC apparently declined to comment, while Amazon was unavailable.

Now if only our own government could do something about companies that seem to do whatever they can to avoid paying the right taxes.

On a separate but related note, The European Commission is set to announce new plans to crack down on VAT fraud in the EU, which costs €150 billion in lost tax revenue every year. It's also expected to announce a major reform of EU tax rules on Wednesday. [BBC News]

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