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EU orders Amazon to pay $295 million in back taxes



EU Commissioner for Competition Margrethe Vestager addresses a press conference at the European Commission in Brussels on October 4, 2017. 
American e-commerce company Amazon was ordered to pay $295 million in back taxes by the European Commission on Wednesday, stating that it had been given an unfair tax deal in Luxembourg.

This ruling by the European Commission was a part of their goals to reinforce their tax regulation towards multinational companies operating in EU as their member states had used to attract companies to set up their headquarters in their country, resulting in competition between states and companies manipulating them.

Margrethe Vestager, the person in charge of the crackdown, says that Amazon had benefited from a tax deal with Luxembourg since 2003 that enables them to pay less taxes than other companies. "As a result, almost three quarters of Amazon's profit were not taxed" she said.

Amazon might appeal the ruling, saying that it "did not receive any special treatment from Luxembourg and that we paid in full accordance with both Luxembourg and international tax law". 

The rejection to the ruling is followed by Luxembourg although they are "strongly committed to tax transparency and the fight against harmful tax avoidance." Luxembourg's economy has been profiting from providing multinational companies setting up headquarters on their country.

Sources
Reuters
AP News
BBC
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