EU demands back tax from Amazon and requests Ireland put pressure on Apple
The EU is cracking down on companies utilizing tax loopholes to lessen their financial burden, and it is starting with arguably the most prominent companies it could, Apple and Amazon.
EU puts pressure on Apple and Amazon
The European Union is coming after Amazon that has, in its eyes, made use of an illegal tax deal in Luxemburg. Since 2003, when it set up its subsidiary in the country, the EU claims that Amazon has received illegal state aid. As such, Amazon is in the red for a quarter of a billion euros for the period.
Margrethe Vestager, the European Commissioner for Competition shared her findings on the Amazon case. “Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon's profits were not taxed. In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules.
“This is illegal under EU State aid rules. Member States cannot give selective tax benefits to multinational groups that are not available to others."
There will be interest lumped upon the sum in question, accumulated over the eight year period, concluded the three-year investigation. Amazon, unsurprisingly, disputes the state aid accusation: “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.
“We will study the commission’s ruling and consider our legal options, including an appeal.”
In addition, Ireland is being taken to court for its failings in collecting tax from Apple, which, in Europe, calls the nation home. The fee is reportedly around €13bn in back taxes.
She said: “We understand that recovery in certain cases maybe more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition.”
She followed up the announcement with two succinct tweets.
Know it may be difficult, but more that 1 year after Apple decision, tax benefits not recovered by Ireland. We ask EU court to look into it.
— Margrethe Vestager (@vestager) October 4, 2017
.@amazon tax benefits in Luxembourg are illegal under our common European rules on state aid. Amazon to repay benefits worth around €250 mio
— Margrethe Vestager (@vestager) October 4, 2017