London: +44 (0)20 7236 2601
St Albans: +44 (0)1727 869141
Rickmansworth: +44 (0) 1923 771010
Milton Keynes: +44 (0)1908 605552

Amazon under the spotlight again

The EC has opened an investigation into whether Luxembourg’s tax ruling on the tax paid by Amazon in Luxembourg complies with the EU rules on state aid.

Very broadly, tax rulings or transfer pricing arrangements may involve state aid if they provide selective advantages.

The ruling applies to Amazon’s Luxembourg-based subsidiary which records most of Amazon’s European profits.

Under the tax ruling, Amazon pays a tax deductible royalty to a partnership established in Luxembourg which is not subject to tax in Luxembourg.  As a result, most European profits of Amazon are recorded in Luxembourg, but are not taxed there.

The EC is concerned that the ruling could underestimate the taxable profits of Amazon and thereby provide an economic advantage by allowing the group to pay less tax than other companies whose profits are allocated in line with market terms.  The investigation seeks to determine whether this concern is justified.



Date: 4th November, 2014
Author: Cathy Corns


Articles from this Author

Contact Business Service Partners

Choose from the drop down menu below to select a Partner to contact.


Football #finance short-term cost control, profitability and sustainability @mercerhole Andy Turner sheds light on……

Lisa Spearman, Private Client Partner updates on 'Changes to Main Residence Relief from Capital Gains Tax'……



For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole

Click here to follow us on LinkedIn