Amazon tax deal with Luxembourg: Retail giant received state aid, says European Commission

The European Commission has declared that Amazon's tax arrangements in the duty haven of Luxembourg could have constituted as "state aid" in its preliminary findings.

In a detailed document, the EC declared that its "preliminary view is that the tax ruling... by Luxembourg in favour of Amazon constitutes state aid."

The e-commerce giant has refuted this and said that it "has received no special tax treatment from Luxembourg".

"We are subject to the same tax laws as other companies operating here [in Luxembourg]."

The document was sent to the Luxembourg Ministry of Foreign Affairs on 7 October, but has been released for public viewing today (16 January).

The letter details the EC's suspicions regarding Amazon's tax dealings in the western European country, and asks whether "Amazon has a financial incentive to exaggerate the amount of the royalty when applying the transfer pricing arrangement."

It adds: "If the royalty is exaggerated, it would unduly reduce the tax paid by Amazon in Luxembourg by shifting profits to an untaxed entity from the perspective of corporate taxation."

The Luxembourg finance ministry says: "Luxembourg is confident that the state aid allegations in this case are without merit and will be able to convince the Commission of the legitimacy of the anticipatory decision in question and that no competitive advantage was granted."