Starting on 1 May, Amazon has booked turnover in separate European countries instead of moving all funds to Luxembourg to avoid taxes. Those tax arrangements were a thorn in the side of the European Union.
Great Britain, Germany, Italy and Spain
Amazon is revising its European tax practices: a spokesperson told the Wall Street Journal that the eCommerce giant has started "tax payments for every European country where it previously had tax benefits through a construction with Luxembourg". Great Britain, Germany, Italy and Spain are among the first countries Amazon has altered its tax practices.
The company says it has been working on a changed tax practice for two years. Nevertheless, the European Commission has been examining Amazon's tax deals with the Grand Duchy of Luxembourg since October 2014. Early 2015, the Commission has stated that Luxembourg has given Amazon unlawful tax benefits and that these tax benefits are not possible within the legal framework for the internal EU market.
Amazon's decision to alter its European tax practices, could have massive repercussions for other multinationals as Europe is also investigating similar constructions between car manufacturer Fiat and Italy, electronics concern Apple and Ireland or coffee chain Starbucks and the Netherlands.