“If these initial doubts are confirmed, it is extremely unfair on other companies,” he added. Almunia claimed there were grounds to suspect that the amount of this royalty, which lowers the taxable profits of Amazon each year, might not be in line with market conditions. However, in Amazon’s case it doesn’t even pay corporation tax, but instead a tax-deductible royalty. The Luxembourgish decision on how Amazon should be taxed dates back to 2003 and is still in force. However, if they are not, and countries permit such transfer pricing arrangements to allow companies to pay lower tax, this could be deemed illegal state aid. This is permissible under EU law, as long as the internal group prices are in line with market prices. This practice is used to orchestrate where a group’s taxable profits will lie (usually in the cheapest country). These are the prices one subsidiary of a corporate group charges another subsidiary of the same group for goods or services. “Luxembourgish tax authorities agreed to limit the tax burden no matter what the profits,” he said.Īt the heart of the matter are transfer pricing arrangements. However, he said that there were additional concerns with Amazon’s tax dealings. Europe’s outgoing competition commissioner, Joaquin Almunia, confirmed on Tuesday that he has launched an investigation into Amazon’s tax dealings in Luxembourg despite his imminent departure of his post.Īlmunia, who is due to leave office at the end of this month when his replacement, Margrethe Vestager, comes in, recently opened a similar case probing Ireland’s tax arrangements with Apple.
0 kommentar(er)
