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Home>EU Set to Order Luxembourg to Recoup Allegedly Unpaid Taxes From Amazon -- 2nd Update

EU Set to Order Luxembourg to Recoup Allegedly Unpaid Taxes From Amazon -- 2nd Update

EU Set to Order Luxembourg to Recoup Allegedly Unpaid Taxes From Amazon -- 2nd Update

10/04/2017

 By Natalia Drozdiak and Sam Schechner 

BRUSSELS -- The European Union's antitrust regulator is set to order Luxembourg to retrieve roughly several hundreds of millions of euros in allegedly unpaid taxes from Amazon.com Inc. as soon as Wednesday, according to people familiar with the matter.

The decision would come amid a renewed crackdown by the EU, which has promised to scrutinize tax arrangements between its various member states and big multinationals operating in Europe.

Regulators in Brussels have homed in on sweetheart tax deals that governments have issued to large multinationals in allegedly illegal state aid. Last August, the European Commission ordered Apple Inc. to repay Ireland EUR13 billion ($15 billion) in what it said was uncollected taxes, a ruling both Apple and Ireland are contesting.

U.S. officials under former President Barack Obama sharply criticized the EU's so-called state-aid investigations, arguing the moves undermine international tax norms. The EU's latest decision would come as Republicans are working on U.S. rules that would prevent companies from pushing more profits abroad, which can be relatively easy for technology and pharmaceutical companies to do by putting intangible assets in low-tax countries.

For the EU, Luxembourg's tax practices in particular came under the spotlight after leaked documents revealed details of hundreds of highly favorable deals it has granted to companies including PepsiCo Inc. and FedEx Corp.

Since the Apple decision, Amazon has stood out as one of the largest targets under investigation by the EU.

The commission is also continuing to investigate Luxembourg's tax treatment of McDonald's Corp. and Engie SA.

The commission first opened its formal probe into Amazon's tax arrangements with Luxembourg in October 2014, arguing that a 2003 deal between the two effectively caps the U.S. company's tax payments in the Grand Duchy. The deal was part of a series of transactions known at Amazon as Project Goldcrest.

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