Amazon Tax Turmoil: ‘Taxation Must Be the Same for Every Company’ in EU

Amazon Tax Turmoil: ‘Taxation Must Be the Same for Every Company’ in EU
AFP 2017/ ADRIAN DENNISBusiness17:52 05.10.2017(updated 18:18 05.10.2017) Get short URL


Amazon is facing a bill for hundreds of millions of euros in back taxes from the European Commission. In an interview with Sputnik, Marjaana Helminen, Professor of International and Comparative Tax Law at the University of Helsinki, said that the EU’s legislation should be observed by each and every organization.

“There is no special push against US companies. The European Commission tries to take care that there is a level playing field for all companies in the EU, no matter where the owners of the companies reside,” she said. 

Helminen recalled that “EU member states are not allowed to give state aid to certain companies in the form of more beneficial tax treatment compared to other companies.”

“Taxation must be the same for every company in a similar situation. The European Commission’s decisions confirm its commitment to make sure that profits are duly taxed,” she added.

According to Helminen, although Amazon did not do “something illegal”, the problem is that nobody realized that the agreement between Amazon and the tax administration was so beneficial to the company that it would be regarded as state aid from Luxembourg and forbidden under EU law.

“Paying nothing or only very little in taxes is not against EU law, but the same treatment has to be available to all companies in a similar situation in order to not constitute forbidden state aid,” she said.

The European Commission found that Luxembourg had allowed Amazon to channel a large portion of its profits to a holding company without paying taxes.

The commission said in a statement that its investigation showed that “the level of the royalty payments, endorsed by the tax ruling, was inflated and did not reflect economic reality.”

Right now, Amazon is facing a bill for 250 million euros (294 million dollars) in back taxes.