Amazon to face EU investigation over Luxembourg tax deal: FT

The investigation relates to favorable terms given to Amazon under a 2003 tax ruling, which cap its tax exposure to the Grand Duchy and limit the overall cost to less than 1 percent of the company's European income, the FT reported, citing people familiar with the case. The commission contends that Luxembourg permitted Amazon to misallocate gains within its corporate structure, in a way that fell short of standards expected of an arms-length transaction between corporate subsidiaries, the FT said. This allowed the company to reduce artificially its tax bill on a selective basis, the FT reported citing sources familiar with the initial investigation. If the charges are proven, the commission can ask Luxembourg to recoup the substantial state subsidy from the firm, the newspaper reported.

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