Over the past couple decades Amazon and other tech companies (as well as just about every multi-national that mattered) have negotiated sweetheart deals with various European states to lower the corporate income tax paid on their revenues.
Starbucks had a deal with the Netherlands , Fiat Chrysler struck one with Luxembourg, Apple had a deal with Ireland, and Amazon was also paying off the Grand Duchy.
Several of those sweetheart tax cuts have been ruled illegal, and now it’s Amazon’s turn in the iron maiden.
Reuters reports that Amazon has been fined quarter of a billion euros:
Amazon was told on Wednesday to pay about 250 million euros ($295 million) in back taxes to Luxembourg, the latest U.S. tech company to be caught up in a European Union crackdown on unfair tax deals.
The fine was much lower than some sources close to the case had expected and is only a fraction of the 13 billion euros that Apple Inc APPL.O was ordered to pay to Ireland last year.
EU Competition Commissioner Margrethe Vestager, who has other big U.S. tech companies in her sights, has taken a tough line on multinational companies’ approach to tax. “Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon’s profits were not taxed,” Vestager said.
Amazon said it was considering an appeal.
“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,” Amazon said in a statement after the announcement.
Considering how much Amazon sells each year, that fine could be paid out petty cash.
The €250 million fine was levied against a tax dodge that started in 2003, and just to put things in perspective, back in August the Guardian reported that Amazon paid just €16.5 million in taxes on European revenues of €21.6 billion – well under 1% of its annual revenues.
Amazon is getting off easy, and Luxembourg got off even easier – it gets to keep the fine as what is no more or less than a reward for the tax dodge.
And I thought US tax laws were screwy.
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