Amazon: Luxembourg's tax ruling practice in relation to online retailer probably 'constitutes State aid', European Commission finds

The EC opened its investigation in October, making the US company the latest global firm to have its tax practices assessed by the EU

Last year Amazon said in a statement: "Amazon has received no special tax treatment from Luxembourg, we are subject to the same tax laws as other companies operating here" (AFP/Getty )

The European Commission (EC) has said that Luxembourg’s tax ruling practice in relation to the Amazon group probably "constitutes State aid".

European Union antitrust regulators have today published details of their investigation into the online retailer’s tax-minimising arrangements with the known tax haven.

The EC opened its investigation in October, making the US company the latest global firm to have its tax practices assessed by the EU. It focused on whether Luxembourg broke EU state aid rules by agreeing a deal which allows Amazon to operate almost tax-free in Europe.

And the document concluded that it had, stating: "Since the contested tax ruling fulfils all four conditions under Article 107(1) TFEU, the Commission takes the view, at this stage, that it constitutes State aid within the meaning of that provision."

In October last year Amazon said in a statement: "Amazon has received no special tax treatment from Luxembourg, we are subject to the same tax laws as other companies operating here."

Luxembourg also disputed the investigation. Its finance ministry said in a statement: "Luxembourg is confident that the allegations of state aid in this case are unsubstantiated and that the Commission investigation will conclude that no special tax treatment or advantage has been awarded to Amazon."

The Commission is also investigating whether a unit of Italian carmaker Fiat benefited from unfair state aid to the detriment of competitors as a result of its tax arrangements with the tiny duchy.

It is separately probing deals between Apple and Ireland and Starbucks and the Netherlands.

Luxembourg has faced international criticism following media revelations in November based on leaked documents - dubbed "LuxLeaks" - that detailed its role in helping companies channel profits through the country and pay low tax rates rather than higher rates in states where they did more business.

The leaks put pressure on European Commission President Jean-Claude Juncker, former long-time prime minister of Luxembourg, to explain his role in the country's tax policies.

Juncker has defended the country's tax practices, but is now promoting a plan for a common EU system to share tax information.

The Independent has contacted Amazon for comment

Additional reporting by Reuters