European Commission lays bare Amazon tax deal with Luxembourg

Source: FINANCIAL TIMES

European Commission lays bare Amazon tax deal with Luxembourg
January 16, 2015 9:05 am
Alex Barker in Brussels

Luxembourg’s unorthodox tax deal with Amazon was laid bare by European Commission investigators on Friday, who believe it artificially lowered and “capped” the online retailer’s tax bill, in breach of EU law.

In a 23-page letter outlining preliminary conclusions from its probe, Brussels alleges that Amazon’s European hub was founded on a favourable and selective treatment that amounts to an illicit state subsidy, which may need to be clawed back.

The case has political significance because Amazon’s tax deal was negotiated in 2003 while Jean-Claude Juncker, current commission president, was serving as Luxembourg’s premier. It follows thousands of pages of leaks that have piled political pressure on Mr Juncker by showing how other multinationals operating in the grand duchy pay negligible tax. ...

Read more: http://www.ft.com/cms/s/0/733c68bc-9d4d-11e4-9b22-00144feabdc0.html