The Independent Uganda: You get the Truth we Pay the Price
The arrangement, which has since been discontinued, “enabled Amazon to shift the vast majority of its profits from an Amazon group company that is subject to tax in Luxembourg to a company which is not subject to tax.”
The latter was an “empty shell” with no employees, no offices and no business activities, the commission said.
Once found at fault, a country must recover the amount granted in illegal state aid, potentially a huge amount of money given that some of the tax deals date back many years.
– Juncker questions –
Many of the Brussels probes came in the wake of the “Luxleaks” scandal which revealed details of tax breaks given by the wealthy duchy to dozens of major US firms.
The revelations came as a particular embarrassment for European Commission President Jean-Claude Juncker, who was prime minister of Luxembourg at the time when the tax deals were made.
In similar cases against tax deals for coffee-shop chain Starbucks in the Netherlands and Italian automaker Fiat in Luxembourg Vestager ordered both companies to pay roughly 30 million euros.
But Vestager’s biggest decision by far was against Apple in Ireland, which shocked Washington. The iPhone maker, as well as Ireland, have appealed the decision.
Under Vestager, the European Commission has taken the lead in questioning the dominance of US tech giants. In June, the EU slapped Google with a record 2.4-billion-euro ($2.8-billion) fine for illegally favouring its shopping service in search results.
But there are signs politicians are now following her lead, with Macron leading the charge in a landmark speech last month on his vision for the future of Europe after Brexit.
Macron called for a new type of tax on technology giants like Facebook and Google based on how much value they create in a country rather than the profits, and has also proposed a single corporate tax band for all EU countries by 2020.
Juncker announced at the EU digital summit in Tallinn last week that he would propose the new tax on internet giants next year, despite opposition by low-tax states like Ireland and Luxembourg.
