A report from the European Commission now declares that Amazon has received unfair advantages through its deal with the Luxembourg government. The Commission feels the deal was partially cosmetic, in order to disguise its true intent.
It took only 2 weeks, back in 2003, for the Luxembourg government to analyse and sign an agreement with Amazon, much quicker than is usually the case in such matters. The European Commission wonders whether an independent party would have accepted that deal under normal market conditions in the same way Luxembourg had done.
The case revolves around LuxOpCo, Amazon European headquarters which manages all European websites. That company had a 2013 net turnover of 13.6 billion euro, about a fifth of Amazon's total turnover. Regardless of the high sum, Amazon barely paid any taxes on that income, allegedly assisted by Luxembourg.
The commission's preliminary ruling is that the deal constitutes unlawful state support, while it is still investigating similar deals (Fiat in Luxembourg, Apple in Ireland and Starbucks in the Netherlands).