EU Orders Recoup of $300 Million in Amazon Back Taxes -- Update
By Natalia Drozdiak and Sam Schechner
BRUSSELS--The European Union on Wednesday upped the stakes in its push to collect taxes from U.S. tech giants, pressing its cases against Amazon.com Inc. and Apple Inc.
The European Commission, the bloc's antitrust regulator, ordered Luxembourg to recoup EUR250 million ($294 million) from Amazon in allegedly unpaid taxes.
The EU said Luxembourg had granted the e-commerce giant illegal state aid in the form of a 2003 sweetheart tax deal, which was prolonged in 2011, that illegally lowered Amazon's tax payments to the Grand Duchy.
The regulator also referred Ireland to the bloc's highest court, the European Court of Justice, for failing to implement last year's blockbuster decision that Dublin retrieve roughly EUR13 billion from Apple in uncollected taxes. The regulator had said Dublin's illegal tax benefits allowed Apple to avoid paying that money.
The decisions are part of a broader effort by the EU to wring more money out of technology giants in Europe through various means.
"Companies must pay their fair share of taxes," said EU antitrust chief Margrethe Vestager at a press conference. "Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules."
"We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law," an Amazon spokesman said in response. Amazon added that it would consider an appeal.
Luxembourg said it took note of the decision, adding that Amazon hadn't been granted incompatible aid because it had been taxed in accordance with the tax rules applicable at the time.