EU orders Amazon to repay $295 million in Luxembourg back taxes

U.S. | 6/8/2017 | Robert-Jan Bartunek
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BRUSSELS (Reuters) - Amazon (AMZN.O) was told on Wednesday to pay about 250 million euros ($295 million) in back taxes to Luxembourg, the latest U.S. tech company to be caught up in a European Union crackdown on unfair tax deals.

The fine was much lower than some sources close to the case had expected and is only a fraction of the 13 billion euros that Apple Inc APPL.O was ordered to pay to Ireland last year.

EU - Competition - Commissioner - Margrethe - Vestager

EU Competition Commissioner Margrethe Vestager, who has other big U.S. tech companies in her sights, has taken a tough line on multinational companies’ approach to tax.

“Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon’s profits were not taxed,” Vestager said.

Amazon - Appeal

Amazon said it was considering an appeal.

“We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law,” Amazon said in a statement after the announcement.

Amazon - Shares - Wednesday - Trading

Amazon shares were little changed in early Wednesday trading.

“This is about competition in Europe, no matter your flag, no matter you ownership,” Vestager said.

Debate - French - President - Emmanuel - Macron

She also welcomed the debate kicked off by French President Emmanuel Macron who called for more integrated corporate tax regimes in Europe, aiming to close the loopholes used to reduce tax bills.

While the exact amount Amazon needs to repay is yet to be calculated, the 250 million euros is significantly less than the 400 million euros which sources close to the matter told Reuters a year ago was under consideration by Vestager.

Bill - Commission - Amazon - Euros - EU

The bill suggests the Commission believes Amazon shielded around 900 million euros in EU profits from tax, calculations by Reuters show.

For most of its existence, Amazon has worked on razor thin profit margins to fuel its global expansion, making only $2.4 billion profit on global revenues of...
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