European Union goes after Amazon & Apple over unpaid taxes

Europe steps up efforts to collect $15 billion from Apple

Europe steps up efforts to collect $15 billion from Apple

The EU Commission previous year hit U.S. tech giant Apple with a 13 billion euro ($A20 billion) tax bill in the wake of an investigation which found that Apple paid 50 euro in tax for every one million of profit made outside the USA in 2014.

In a widely quoted statement, Amazon said: "We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and global tax law".

Apple chief executive Tim Cook said past year that the ruling would have a "profound and harmful effect" on investment and job creation in Europe and that the company paid all the taxes it owed in all the countries where it operated.

The Commission found Luxembourg had breached its rules on state aid by allowing Amazon's tax-minimising setup since 2003.

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According to the European Commission, Amazon and Apple have received illegal tax benefits through their respective countries of operation. "Member states may not grant selective tax concessions to multinational groups to which other companies do not have access".

Amazon EU pays corporate tax but, as a limited partnership, Amazon Europe Holding Technologies does not.

"We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and worldwide tax law", a spokesperson told WIRED.

"Luxembourg has been fully cooperating with the Commission in its investigation and is strongly committed to tax transparency and the fight against harmful tax avoidance".

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Under EU State guidelines, it requires that "incompatible State aid is recovered in order to remove the distortion of competition created by aid".

"Luxembourg gave illegal tax benefits to Amazon".

The European Commissioner for Competition Margrethe Vestager said the labeled the practice as illegal.

The European Union is increasingly going after big United States tech companies, also hitting Google and Apple with huge fines. The Luxembourg tax ruling allowed Amazon to shift the vast majority of its profits to Amazon EHT and thus circumvent paying large amounts of tax. While the operating company "was the only entity actively taking decisions and carrying out activities" linked to Amazon's European Union business, the holding company was "an empty shell that simply passed on the intellectual property rights to the operating company for its exclusive use". Amazon paid a quarter the tax compared to businesses, she added.

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