The European Commission said Friday that Luxembourg might be giving the online retail giant Amazon tax advantages that give it an unfair advantage over competitors.
{mosads}European regulators said that Amazon uses subsidiaries in Luxembourg, a small country already known for its low tax rates, to slash its bill even more on the continent.
The latest report on Amazon’s tax practices comes as Europe isc cracking down on tax dodging, as one way to battle budget shortfalls. In addition to Amazon, European regulators are also looking into Apple, Starbucks and other big U.S. multinationals.
Amazon’s arrangement with Luxembourg, approved quickly more than a decade ago, gives the company a leg up each year, the European Commission said.
Under the arrangement, Amazon’s main European subsidiary in Luxembourg pays another subsidiary for the use of Amazon’s intellectual property rights. That second subsidiary doesn’t owe corporate tax in Luxembourg, allowing Amazon to slash its tax bill, the commission said.
Amazon told news outlets Friday that it gets no special sweetheart deal from Luxembourg, and face the same laws that other companies do in the country.