The European Commission is poised to launch a probe into an unorthodox tax deal, which allows Amazon to reap state subsidies in Luxembourg.
The investigation is to be launched following serious concerns over improper state aid that Amazon’s European operations has benefited from for more than a decade.
The clampdown on such tax deals has seen Apple’s affairs in Ireland probed along with Starbucks’ in the Netherlands, according to the FT. All the countries and companies involved reject any improper arrangements or wrongdoing.
Investigators believe Luxembourg gave Amazon favourable terms in a 2003 tax ruling, which caps its tax exposure to the Grand Duchy and helps limit its overall bill to less than 1% of its European sales.
The move will heap further pressure on Amazon which has already come under fire for its tax affairs in the UK, US and France.
In 2003, it is believed that Luxembourg introduced an effective cap on Amazon’s profits that can be taxed, an upper limit Brussels believes is unorthodox.
In its 2013 accounts, Amazon’s Luxembourg operating company posted sales of €13.6bn and profits of €28.8m.