Amazon needs to pay Europe 250 million euros in back taxes

The European Commission had some bad news for American Amazon: it needs to pay an additional 250 million euro in taxes because the Commission feels it enjoyed illegal state aid from Luxembourg for many years.

Lower profit

The investigation into this case of illegal state aid was launched three years ago and focused on Amazon’s 2003 arrangement with the Grand Duchy of Luxembourg. Amazon was able to lower its European profit through two Luxembourg subsidiaries.

The European Commission now ruled that those arrangements are illegal and that Amazon needs to pay 250 million euro in taxes because of what it managed to avoid in taxes through the arrangement.

Apple

This means Amazon is the European Commission’s next target in its battle against illegal state aid. Apple was already informed it would need to pay 13 billion euro in late taxes, after its arrangement with Ireland was deemed illegal. Starbucks and Fiat have faced similar convictions and a total of 35 countries have also been forced to pay late taxes.

It is possible the American government may appeal Europe’s decision, because during president Obama’s reign, the country also protested the Apple case, because it felt Europe appropriated money that was meant for the American Treasury.