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EU tax crackdown bruises Apple and Amazon

Wednesday, October 04, 2017 - 01:24

The European Union's crackdown on tax avoidance has now swept in Amazon, with an order to pay up $294 million in back taxes to Luxembourg as the bloc brings Ireland to court over a similar case with Apple. Matthew Larotonda reports.

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The world's largest online retailer has been hit with a $294 million bill from the European Union. Amazon now the latest corporate giant to be swept up in an EU crackdown on tax avoidance. The $294 million, or 250 million euros, will need to be paid to Luxembourg where regulators say Amazon was given an illegal tax advantage in 2003. (SOUNDBITE) (English) EUROPEAN COMPETITION COMMISSIONER, MARGRETHE VESTAGER, SAYING: "It enabled Amazon to shift almost three quarters of its profits from the operating company to the holding company -- in other words, from a company that is subject to tax in Luxembourg to a company, which is not. As a result, three quarters of Amazon's profit from all its sales in Europe remained untaxed." Luxembourg says it didn't give Amazon an unfair edge. The company is one of the biggest employers in the tiny country, with 1,500 workers. But Luxembourg is also under scrutiny for a number of other tax deals including the likes of McDonald's and Fiat. It's also only one of several countries involved in the crackdown. For example, Amazon's fine is a paltry figure compared to the $15 billion demanded from Apple over its operations in Ireland last year. The EU also announcing at its news conference that it's going take Ireland to court over that, accusing the country of failing to recover the money in a timely manner. Apple is appealing the case and Ireland has said it will wait for its own court to decide.

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EU tax crackdown bruises Apple and Amazon

Wednesday, October 04, 2017 - 01:24