The EU has released more details about its investigation into tax deals between the Luxembourg authorities and Amazon, and claims that the transfer pricing arrangements agreed with the internet giant more than ten years ago amount to state aid
Margrethe Vestager, EU commissioner for competition, has released a 23-page document which was originally sent to the Luxembourg authorities in October 2014. It sets out the grounds for suspecting that the tax ruling they concluded with Amazon in November 2003 conferred an unfair advantage on the company.
The letter concludes: ‘At this stage, the Commission considers that the contested tax ruling appears to result in a reduction of charges that should normally be borne by the entity concerned in the course of its business, and should therefore be considered as operating aid.’
The document provides details of the Luxembourg tax ruling covering a transfer pricing arrangement which saw Amazon establish its European headquarters in the country. This included the creation of Amazon EU Sarl, a Luxembourg commercial company (also referred to as LuxOpCo) which is the principal operator of the retail and business services offered through Amazon’s European websites.
