UPDATE: EU orders Luxembourg to recoup $294 million from Amazon in back taxes
By Sara Sjolin, MarketWatch
EU is also suing Ireland for failing to recoup illegal state aid from Apple
The European Commission has ordered Luxembourg to recoup EUR250 million ($294 million) from Amazon.com Inc. in back taxes, saying the U.S. e-commerce giant has received illegal state aid.
The EU's antitrust body said Wednesday Luxembourg had granted Amazon (AMZN) "undue tax benefits" that allowed the company to pay substantially less tax than other businesses.
"As a result, almost three quarters of Amazon's profits were not taxed. In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules," said Margrethe Vestager, the EU's competition commissioner.
"This is illegal under EU state aid rules. Member states cannot give selective tax benefits to multinational groups that are not available to others," she said.
Amazon shares were down 0.6% in premarket trade.
The company said in a statement it believes it did not receive any special treatment in Luxembourg and that it paid taxes in full accordance with both Luxembourg and international law.