The interrogation concentrates on tax ruling procured by Amazon, as critics consider it as too lenient
The European commission has deepened its interrogation on the tax condition of mutinationals, starting a formal review to whether the online shop Amazon's complicated tax status in Luxemborg is so lenient on the amount for the company.
The core of the investigation consists of local tax ruling made in 2003 by the company's main European operating affiliate, Amazon EU Sarl. This group earns lower sales from all over Europe, consisting over 4p billion from UK consumers.
The tax ruling of Luxembourg waives the payment of Amazon EU Sarl for the royalties to an affiliate operation, lowering its taxable income. That entity of the subsidiary is said to be a Luxembourg limited partnership however it is not considered as taxable.
"Thus, majority of European income of the company are encoded under Luxembourg but are not subject for tax in the area. At this moment, the commission sees that the amount of such royalty might not coincide with the market status," as explained by the European commission in their statement.
The interrogation will not look into these issues further, and the bureau emphasized the result of its review will not be biased.
The US organization, led by Jeff Bezos, disagreed the charge. "The company did not receive any special tax arrangement from Luxembourg, we are still following similar tax laws like other organizations operating in this place," as he explained.
The Luxembourg finance agency commented, "Luxembourg is pretty sure that the accusations of state assistance in this issue are unconfirmed and that the interrogation will show that there is no special tax consideration or treatment has been given to the company."
The commission has already asked three other state assistance to conduct reviews on the tax deals of major multinationals. Some of them are Fiat Fiance and Trad, Apple in Ireland and Starbucks in Netherlands.
