Amazon could be fined for illegal Luxembourg state aid

Web retailer Amazon may have paid too little tax in Luxembourg, the country from which it operates its European branches, for more than a decade. If Amazon is found to be at fault, it will probably still have to pay the underpaid tax.

It is not yet entirely clear how much underpaid tax this concerns. Because the tax deal with Luxembourg has been going on since 2003 and Amazon generates billions of euros in turnover per year in Europe, it could be a large amount. The case is extra sensitive, because the tax deal came about when the current president of the European Commission, Jean-Claude Juncker, was prime minister of Luxembourg, reports the business newspaper Financial Times.

Amazon shifted its turnover within its own group to allow as much turnover as possible and as little profit as possible to end up in Luxembourg, after which it only had to pay a minimal percentage from the Luxembourg government. Luxembourg and Amazon reportedly closed the deal before the company settled in the country.

The online store giant is not the only company to which a European investigation has been launched into underpaid taxes. Apple has been favored by the Irish government for years, the Commission’s preliminary conclusion reads. PayPal, Facebook, Zynga and Google would also be the subject of investigation.