Amazon established a substantial base in Luxembourg as its European headquarters, employing around 500 people. A European headquarters makes sense for a US multinational with a large European customer base, mainly for logistical reasons.  European corporate tax rates are generally lower than the US rate of 35%, but this is unlikely to have been a major driver. Within Europe, Amazon is perfectly entitled (under EU 'freedoms') to choose Luxembourg, although the low rate of 3% VAT on digital sales (such as e-books) may have been an attraction.