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Amazon ordered to pay €250m in back taxes Amazon and Apple hit by EU tax crackdown
(35 minutes later)
Amazon has been ordered to repay €250m (£221m; $293m) in back taxes after the EU said it had been given an unfair tax advantage in Luxembourg. The European Union has launched a fresh crackdown against tech giants Amazon and Apple over tax avoidance.
The EU said the online giant had been allowed to pay "substantially less tax than other businesses as a result". Amazon has been ordered to repay €250m (£221m; $293m) in back taxes after the European Commission said it had been given an unfair tax deal in Luxembourg.
"This is illegal under EU state aid rules," the European Commission said. The Commission also plans to take Ireland to court over its failure to collect €13bn of back taxes from Apple.
Amazon is the latest big US company to be reined in by the EU competition regulator, which also told technology group Apple to pay back up to €13bn. Amazon denied it owed any back tax, saying it did "not receive any special treatment from Luxembourg".
"Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon's profits were not taxed," European Competition Commissioner Margrethe Vestager said in a statement. "We paid tax in full accordance with both Luxembourg and international tax law," the online shopping giant said in a statement.
But European Competition Commissioner Margrethe Vestager said the Luxembourg arrangement meant that Amazon had been allowed to pay "substantially less tax than other businesses", which it said was "illegal under EU state aid rules".
'Selective' benefits
"Luxembourg gave illegal tax benefits to Amazon. As a result, almost three-quarters of Amazon's profits were not taxed," Ms Vestager added.
She said Amazon paid four times less tax than other local companies.
"Member states cannot give selective tax benefits to multinational groups that are not available to others," she added.
The decision follows a three-year long investigation by the European Commission, which said in 2014 that it had suspicions the arrangement had broken EU rules.
The tax deal between Luxembourg and Amazon was struck in 2003.
The Commission said it had enabled Amazon to shift the "vast majority" of its profits from Amazon EU to Amazon Europe Holding Technologies, which was not subject to tax.
It said this arrangement had "significantly reduced" Amazon's taxable profits.
At the time the deal was struck, Jean-Claude Juncker, the European Commission's president, was the prime minister of Luxembourg.
The €250m is less than an estimate of €400m last year.The €250m is less than an estimate of €400m last year.