EU to unveil Amazon’s Luxembourg tax details
16 January 2015
Posted by: Author: Gaspard Sebag
Author: Gaspard Sebag (BDlive)
Amazon.com’s tax affairs will be back in the limelight on Friday as the European Union (EU) publishes details of its probe into a sweetheart deal with Luxembourg.
The European Commission will release a nonconfidential version of a letter outlining suspicions that the online retailer unfairly shifted profits to lower its taxes, the regulator said on Thursday. The letter was sent to Luxembourg officials as the EU opened a formal probe into the Amazon tax accord on October 7 last year.
Most European profits of Amazon are recorded in Luxembourg but are not taxed there as a result of a 2003 tax ruling, which is still in force and applies to a subsidiary in the country, the EU said at the time.
The commission’s probe of tax deals expanded last month as the competition regulator asked all EU countries to give it information about financial agreements with multinational corporations.
Until then, the EU had focused on specific firms with probes into Irish tax deals with Apple, Luxembourg’s taxation of Fiat Finance and Trade, and Amazon, as well as the Netherlands’ treatment of Starbucks.
Amazon spokesman Drew Herdener declined to comment.
The commission is in charge of policing state subsidies that skew competition and can request countries to claw back illegal aid. The financial probes began under the previous commission president, Jose Barroso, who left office at the end of October last year.
Tax issues have cast a shadow over the first few weeks of Jean-Claude Juncker’s tenure as the new commission chief. A group of investigative journalists disclosed in November last year that Luxembourg helped hundreds of firms shave tax bills. Mr Juncker, who was Luxembourg’s prime minister for almost 19 years until late 2013, has said that he had no involvement in the deals.
In 2005, when Mr Juncker held the prime minister and finance minister posts simultaneously, he told the Luxembourg Parliament that his government planned to make the country the main address for e-technology, citing names such as Amazon as being flagships "for the policy that is being driven by the finance minister and by others."
Mr Juncker said at the time: "Promising contacts" with Amazon and "other international players" happened partly because of "a favourable tax environment that we have created here in Luxembourg".
A push for a formal investigation of sweetheart tax deals has gained momentum in the European Parliament in the wake of the so-called LuxLeaks revelations.
This article first appeared on bdlive.co.za.