Amazon to be hit with €13bn EU back tax claim

The European Union is set to claim millions of Euros from Amazon in back taxes, according to the Financial Times.

The EU’s competition commissioner Margarethe Vestager has been leading an investigation into the online retail giant’s ‘sweetheart’ tax deal with Luxembourg. After three years of investigation, Vestager is expected to issue a recovery order for unpaid taxes.

A preliminary ruling from the EU said that the arrangement struck between Amazon and Luxembourg in 2003 constituted ‘state aid’.

A similar arrangement between Apple and Ireland was also declared to be state aid in 2016, leading to the EU claiming €13bn (£11.5bn) in back taxes from the technology brand. Apple is appealing against this ruling.

Amazon has previously said that it “has received no special tax treatment from Luxembourg.” Amazon claims it is subject to the same tax laws as other companies based in the country.

The European Commission has also announced plans to address VAT fraud, including changes to cross-border taxes. VAT fraud is believed to cost the EU €150bn each year.