The European Commission will investigate whether Amazon has illegitimately received government aid from the Duchess of Luxembourg. It receives a hugely beneficial tax treatment in that country.
Less than 1 percent
That is why the European Commission will launch a thorough investigation into the arrangement Amazon and Luxembourg have struck. According to the researchers, Amazon pays less than 1 % tax on its European turnover in Luxembourg, which means it channels pretty much all of its European turnover through Luxembourg.
The country has also placed a limit on how much Amazon profit can be taxed, a deal that had already been put in place prior to Amazon's Luxembourgish arrival.
It is not the first time Amazon has received flak for the tax benefits it seems to abuse, with criticism coming from France and the United States among others. The company claims it pays all the necessary taxes.
It is a highly sensitive matter to investigate Luxembourg-based companies as Jean-Claude Juncker was prime minister in Luxembourg and will now head the European Commission.
It has already researched Apple in Ireland and Starbucks in the Netherlands in an attempt to halt this type of system.