(Bloomberg) Amazon.com Inc.’s hastily reviewed tax deal with Luxembourg doesn’t comply with international accounting standards, European Union regulators said.
The EU told the Luxembourgish officials in a letter that the deal, which was assessed within 11 days, gives the Internet retailer an unfair advantage over competitors. The document was sent in October when regulators started a probe of the tax deal and posted on an EU website today.
The state-aid probe into agreements with Amazon and the revelation of thousands of pages of leaked secret tax deals with companies from around the world have shaken Luxembourg, whose population of about 550,000 enjoys the highest income per capita of any EU nation.
Amazon posted a net loss of $437 million in the third quarter last year, its worst since at least 2003. The results included a $170 million inventory charge largely attributable to the Fire smartphone, a flop that has come to represent one of Amazon’s failed bets on a big investment.
“Amazon has received no special tax treatment from Luxembourg —we are subject to the same tax laws as other companies operating here,” Drew Herdener, a spokesman for the company in Luxembourg, said in an e-mailed statement.
Aside from Amazon, the EU is also examining Luxembourg’s taxation of Fiat Finance & Trade, the Netherlands’ treatment of Starbucks Corp. and an Irish pact with Apple Inc. The commission is in charge of policing state subsidies that skew competition and can request countries to claw back illegal aid.
“Luxembourg has submitted all requested information to the commission and is fully cooperating with the commission,” the country’s finance ministry said in a statement on its website today.
