The European Commission has ordered Amazon to repay €250m (£222m) in back taxes after it received “unfair” subsidies from Luxembourg.
The decision follows a three-year investigation into Amazon’s tax payments, which the commission launched in 2014.
The new ruling concerns concerns Luxembourg’s tax treatment of two Amazon companies: Amazon EU and Amazon Europe Holding Technologies.
The European Commission said the tax deal had enabled Amazon to shift the “vast majority” of its profits from Amazon EU to Amazon Europe Holding Technologies, which was not subject to tax, “significantly” reducing Amazon’s taxable profits.
It ruled that, subsequently, Amazon avoided taxation on “three-quarters of the profits it made from all Amazon sales in the EU”.
Amazon denied it owed any back taxes. A spokesman for the etailer said: ”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.
“We will study the commission’s ruling and consider our legal options, including an appeal. Our 50,000 employees across Europe remain heads-down focused on serving our customers and the hundreds of thousands of small businesses who work with us.”
However, commissioner Margrethe Vestager, who oversees competition policy, said: “Luxembourg gave illegal tax benefits to Amazon. As a result, almost three-quarters of Amazon’s profits were not taxed. In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules.
“This is illegal under EU state aid rules. Member states cannot give selective tax benefits to multinational groups that are not available to others.”