EU Hits Amazon With Unpaid Tax Bill, Will Sue Ireland For Failing To Collect Apple Taxes

Tyler Durden's picture

Amazon was hit with an order to repay as much as €250 million, plus interest, after the European Commission said Luxembourg illegally slashed the company's bill, making the world’s biggest online retailer the latest U.S. giant to fall afoul of the EU's state-aid rules.

“Luxembourg gave illegal tax benefits to Amazon” and “as a result, almost three-quarters of Amazon’s profits were not taxed,” EU Competition Commissioner Margrethe Vestager said in an emailed statement, adding that “Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules” and “this is illegal under EU State aid rules.”

EU explained that the Luxembourg tax ruling given to Amazon in 2003 and prolonged in 2011, lowered the online retail giant's tax paid in the country “without any valid justification.” The Luxembourg tax pact gave Amazon a “selective economic advantage” by allowing the online retailer’s group “to avoid taxation on three-quarters of the profits it made from all Amazon sales in the EU,” EU says in statement.

Explaining the decision, Vestager told reporters that “what we did investigate is the method to determine the royalty paid by the operating company to the holding company" and said that "the royalty payment level "could not be justified for two reasons. First, the holding company was an empty shell. Second, the operating company was the only company actively taking positions, carrying out activities relating to amazon’s European retail business”

Tax ruling was based on an “unjustified method to calculate Amazon’s taxable profits in Luxembourg,” reducing them to a “quarter of what they were in reality,” the EU said, and noted that Luxembourg will have to determine the exact amount it will have to recover from Amazon, based on the EU’s methodology.

As Bloomberg notes, the Amazon decision adds to a growing list of scalps for Margrethe Vestager in her crackdown on tax loopholes, and follows the controversial Apple decision last year, which reverberated across the Atlantic with the EU accusing Ireland of granting unfair deals that reduced the company’s effective corporate tax rate. At stake in all these decisions are billions of euros that multinational companies have squirreled away in tax havens, out of the reach of authorities in the countries where they make most of their sales.

And just like Apple, shortly after the EU announcement, Amazon denied it had received special treatment: “We paid tax in full accordance with both Luxembourg and international tax law,” Amazon said in an emailed statement. “We will study the commission’s ruling and consider our legal options, including an appeal.”

Separately, the European Commission also said it would sue Ireland over its failure to collect as much as €13 billion in back taxes owed by Apple following an order last year and refers case to EU court.

“More than one year after the commission adopted this decision, Ireland
has still not recovered the money,” EU Competition Commissioner
Margrethe Vestager says in emailed statement.

Ireland had until Jan. 3 deadline to recover tax EU said was owed by Apple. Although Ireland has made progress on the calculation of the exact amount of the illegal aid granted to Apple, it is only planning to conclude this work by March 2018 at the earliest, EU says. The Commission therefore decided to refer Ireland to the EU Court of Justice.

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buzzsaw99's picture

can you imagine how much they would owe if usa states sued for uncollected sales taxes?

Five Star's picture

Ireland is spending over 20% of all is tax revenues servicing is government debt.  

http://thesoundingline.com/sovereign-debt-crisis-interest-expenses-alrea...

GreatUncle's picture

Yep now the Keynes model is only supposed to be 2% to be viable as a long term policy.

All western nations are in the same position the 2% wall is breeched and it will fast approach 100%.

In a reasonable I won't say good global economy Japan kept it going for 20 years but in a low growth world that pace will accelerate.

The false narratives of "raising interest rates" will only accelerate it more like Greece.

We are at admitted ZIRP but their global model really requires an ever increasing NIRP.

THE MODEL IS FAKE it does not work this trickle down economy.

AvoidingTaxation's picture

Switzerland federal debt is going down and it pays negative interest rates on the diminishing pool of federal debt uo to 30y in the future.

They implement a rule in 2004 that forces the.gov not to make debts. I is called the debt-brake, effectibely compelling the .gov to balance their accounts on a full economical cycle.

equity_momo's picture

Shame they couldnt control their psychos in the SNB who dont know what a debt brake is.

JRobby's picture

GOVT really needs the money.

They use it to kill us.

GreatUncle's picture

Buzz they have paid their dues ... you just do not see the payment.

Amazon cloud servers in western nations look to be the hub where all uncertified communications will be blocked.

Where does the information from these hubs go? You tax dollars paid for it of course with a goodwill gesture of few taxes to the government. 2 days ago I stumbled on the "even if you accept the warning of false / fake / bad certificate" you are blocked and their is no way through. You are not legally tried in any form neither and you have no recourse to object to the block. FREEDOM OF SPEECH WITH DEMOCRACY IS DEAD NOW.

Example ...

Set up an new email account an hour ago on thunderbird and the program attempts to verify the new account through the internet if the server is not certified then you are not allowed to connect it is blocked even accepting the warning certificate. Now if I make it only a local connection to read off the emails then it works. YOU CANNOT GO OFF TO AN UNCERTIFIED SERVER no more and Amazon IP's were in their blocking giving up their IP address you can reverse lookup.

So your tax dollars were used to setup this system even in foreign countries "I wonder if the natives realise"? When you wonder why Mozzila Thunderbird" will no longer connect now you know and nothing wrong with the program.

Have fun you can bypass the certificate check on the local machine but not on their server where the censorship is occuring. Of course puppet governments go along with this policy provided their pockets are being filled ... MAKES ANY CONCEPT OF VOTING WORTHLESS.

1st Ammendment / Freedom of Speech ... nope its gone now and you need to consider it now non-existant and go from there.

ThanksChump's picture

Thunderbird works fine with self-signed certificates, but it warns that the cert is self-signed. Perfectly normal stuff. It has always done this and it's for your protection - no one else's. 

 

Real certificates are free now, too, just a bit trickier to install. Tell your email server admins to get off their ass and install a trusted certificate. My Lazy-Jackhole Pro effort meter is almost pegged by your comments above, pal, and you need to read more literature: you ain't vocabulatin' as good as yooz otter.

doctor10's picture

Irexit will be coming to you next.

BlindMonkey's picture

The EU just can't figure out how to not be an asshole to their people. The sue Eastern Europe for not taking refugees, sick the Spanish cops on the Catalonian and shake down Ireland. Amazing. 

doctor10's picture

The "EU" is the voice of its creditors/bankerz...

JohnGaltUk's picture

To send Muslims into Poland would be to send them to their certain death. I have been to Poland and most of the eastern Europe, indeed I am married to one. Eastern Europeans are NOT the liberal west. It is fit in or fuck off. They are very nationalistic, mostly Catholic some Christian Orthodx and they will not tolerate Muslims.

There is a video on Youtube where a whole town attacked a Turkish Kabab shop and burnt it down while the Police leant against the cars and watched. This is the attitude we need here in the UK.

Bollockinell's picture

They attacked the kebab shop because its owners killed a young lad outside their restaurant. If something similar had happend in the UK I'm not so sure the Brits wouldn't have behaved similarly.

FORCE's picture

JohnGaltUk;that is an attitude which already exists within at least 50% of the indigenous white population & a higher level among non muslim immigrants;i have lived in london for 20 years and seen the destructive reality of multiculturalism firsthand;Bliars opening of the floodgates ,causing an annual tenfold increase in immigration (about which the tories have done nothing ),has created a powderkeg of race/religious tension.I would not be surprised within 10-15 years to see in the Uk & other west european nations pogroms against muslims and their total expulsion from the continent.

buzzsaw99's picture

nope.  the muzzies will take over the uk and will thusly acquire state of the art nuclear weapons.  it is inevitable.

BlindMonkey's picture

Which is the next country with the Islamic bomb: England or France?

FORCE's picture

POSSIBLE BUT NOT INEVITABLE;THE SOCIO-POLITICAL DYNAMICS OF RACIAL/NATIONAL FEELING CAN MOVE FROM PASSIVITY & DISCONTENT TO VIOLENT ACTION VERY RAPIDLY; YUGOSLAVIAN CIVIL WAR,SOMALIAN CIVIL WAR,& BURMESE EXPULSION OF ROHINGA'S BEING A FEW EXAMPLES.

Bobbyrib's picture

The EU's rules were made for the benefit of France and Germany. The fact that Ireland is finally starting to profit from their little scheme is a "temporary minor inconvenience" to the krauts.

RealityCheque's picture

I really hope so. Can't take much more of the EU.

Eyes Opened's picture

"Irexit will be coming to you next."

 

Oh how I wish... but not with our euro-loving politicians...

The fact that we are saddled with a national debt of circa €200billion (ba nk bailout) & yet TPTB refuse to collect from apple just shows our "leaders" priorities...

A property tax introduced recently & carbon tax on fuel are other new  perks of being an Irish citizen... 

It was only a concerted effort by thousands of protestors that the (2 year old) water charge was repealed.... tho EU manderins are not finished with THAT...  

We also play host to lots of Big Pharma companies & our pols refuse to tackle the outrageous drug/medicine costs we pay (much more tha n EU av. ) saying it would only cost jobs.... 

I could go on... but I'm only giving myself a headache...    :-(

SoDamnMad's picture

I noticed the French farmers striking to prevent Monsanto from unleashing Roundupon the EU. Seems they found the off-shore accounts of a few policiticains. Now watch your bees die, you agriculture yields fall off and health (immune system failure) deteriorate. Thank you EU

GatorMcClusky's picture

"Greed is good", right?

ThanksChump's picture

Does greed need to be good? It's as natural as farting. Why do you hate people?

decon's picture

The EU will probably use the fine money to bail out a bank.

Innominate's picture

Disgusting commies, making theft a virtue everywhere. Glad we're leaving the European Soviet Union.

JohnGaltUk's picture

We have all become just beasts of burden.

You can not debate with a socialist, they never see the individual, all they see is the group.

Socialism is the doctrine that man has no right to exist for his own sake, that his life and his work do not belong to him, but belong to society, that the only justification of his existence is his service to society, and that society may dispose of him in any way it pleases for the sake of whatever it deems to be its own tribal, collective good.

Chryoprase the Troll's picture

This is the attitude we need here in the UK.

But what are you going to eat on a Friday night after leaving the pub?

No Chinese. No curry. No kebabs. Only Christian chips & Orthodox Gyros?

equity_momo's picture

I fell into the trap of debating Brexit in a pub last week with what i assume was a socialist. Who knows , even Conservatives in this country seemt to be socialists.

Anyway , during our chat , he was all emotion and no fact. I matter of factly realed off a bunch of statistics and proven facts about the EU and Brexit and his response? "well they maybe the statistics but i dont believe them. i just dont believe it"

I changed the topic as it dawned on me , these Fabian Socialists dont deal in reality. To them , its a belief system. A faith. He , like the majority of socialist lemmings in this country , literally could not bear to hear stated facts that disproved his utopia. So he simply said he would not believe them.

Incredible.

Ghordius's picture

+1, perfectly credible to me. you need more then education for statistics and facts: will to engage in them and experience

in other words, it's easy to ask from people to be critical, analytical and factual. but it's not easy to deliver such things

and... a pub might be the last place for it anyway. a British pub is supposed to be a kind of refuge, isn't it?

btw, which side did you argue for/against? Leave or Remain?

FORCE's picture

TRADITIONALLY THE LABOUR LEFT WERE DEEPLY EURO-SCEPTIC; TONY BENN,ERIC HEFFER & MICHAEL FOOT. THE CONTEMPORARY CORBYN "SOCIALISTS"ARE IN FACT GLOBAL CRAPITALIST PAWNS & QUISLINGS WHO FEEL CONTEMPT FOR "OLD FASHIONED" THINGS LIKE LOYALTY TO ONES RACE,CLASS OR NATION;THEY ARE A MINORITY & THEIR WORLD IS ENDING....

Debugas's picture

Let me tell you how it will be
There's one for you, nineteen for me
Cos I'm the taxman, yeah, I'm the taxman

Should five per cent appear too small
Be thankful I don't take it all
Cos I'm the taxman, yeah I'm the taxman

If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold I'll tax the heat
If you take a walk, I'll tax your feet

Taxman!
Cos I'm the taxman, yeah I'm the taxman

Don't ask me what I want it for (Aahh Mr. Wilson)
If you don't want to pay some more (Aahh Mr. Heath)
Cos I'm the taxman, yeah, I'm the taxman

Now my advice for those who die
Declare the pennies on your eyes
Cos I'm the taxman, yeah, I'm the taxman

And you're working for no one but me
Taxman!

 

ttps://www.youtube.com/watch?v=bsFRMTbhOn0

doctor10's picture

Here's whats happening ..

All the so called "Western European Social Democracies" are beyond desperate.

They literally have finally run out of other peoples money-ON CURRENT TERMS.

Their creditors are next demanding concentration camp/slave labor condition equivalence be imposed as assurance of repayment of their debts by those governments -before credit is further extended.

The USA liberated Europe twice previously of its foolishness of being "overserved" by their bankerz.

This time around we ourselves have been likewise "overserved" by the bankerz-and are incapacitated.

BlindMonkey's picture

Debt jubilee at the end of a cannon is next. 

Dave the jew's picture

Taxes - just another control mechanism for the masses! Do you really think they need this money ?? Money isn't real, just a tool of total control!
It's a propaganda exercise! These people at the top don't use money or pay taxes . They own entity's ! With the backing of our labour and support , whilst we're paid in toilet paper , it's fantastic! Until that spark of rebellion ignites in the brains of the masses there will be much more of the same !

JohnGaltUk's picture

This is what happens when the state is going bankrupt and they become desparate for taxes soon they will be round your house ckecking down the back of the sofa for any change you might have.

The EU will drive businesses out with comfusing tax regimes and now we have state violence in Catalonia, all investors should be searching for the first EU exit it can find..

zer0's picture

The Irish political establishment are true EU lapdogs, they'll pay whatever fine with a grin on their face and just tax some other aspect of Irish life. And the same shitheads get voted back in. Hopefully the majority will waken up at some stage but I'm just not sure anymore.

quadraspleen's picture

$250m fine. They turned a profit of $857m last fiscal year. I suppose it's quite a big fine, but their turnover was over $30bn

Brazen Heist's picture

Karl Marx may have been wrong on Communism, but he was correct about Capitalism.

It is an exploitative system that benefits the 1% disproportionately than the rest.

GreatUncle's picture

when it reaches 100% exploitation then the P2P starts and governments start treating the population like serfs.

I REFUSE TO EVER SPEAK WITH ONE OF MY POLITICIANS AGAIN as in a fully eploited world you will be one of the exploited.

 

Arrest Hillary's picture

Ask the 99% in Venezuela .... nobody skews income privileges to the party class like socialists ?

CRM114's picture

Simplified Tax Form.

1. How much do you earn?

2. Send it.

THE DORK OF CORK's picture

I  do  not  believe  in  a  centralized  tax  &  spend  system  but  merely  a  script  system  which  balances  prices  with  income.

Having  said  that  the  Irish  statistics  office  have  recently  published  the  Irish  national  balance  sheet  ,  the  data  is  beyond  extreme,  information  to  follow..........

Youri Carma's picture

EU revises rules to guard markets against dumping - Brussels fears approach to penalising cheap Chinese imports violates global standards https://www.ft.com/content/c35c3052-a862-11e7-ab55-27219df83c97

EU readies new anti-dumping tools
https://euobserver.com/tickers/139262

Arrest Hillary's picture

Socialist EU abhors low taxes ?

THE DORK OF CORK's picture

Irish  net  financial  assets

Y2001  :  -20  Billion  euro

Y2009  :  -197  Billion

Y2013  :  -237  Billion

Y2014  :  -312  Billion

Y2015  :  -531  Billion

Notice  the  second  big  fall  between  2013  &2015  ,  a  time  of  high  gdp  growth.

Price  growth  is  destroying  and  transfering  wealth  claims  on  a  massive  scale.

THE DORK OF CORK's picture

Now  let  us  observe  net  financial  assets  as  %  of  total  GDP

Ireland  has  the  largest  negative  number  by  a  mile.

Ireland  :  -207%

followed  by  you  guessed  it.........

Greece  :    -133.7  %

Cyprus  :  -125.9  %

Spain  :  -90.4%

Notice  these  top  5  jurisdictions  are  all  former  peasant  societies  pushed  into  extreme  mercantile  postions  of  serfdom.

writeround's picture

These all EU countries that have been subsidised over the years by the UK and now wanting more from us for Brexit!

THE DORK OF CORK's picture

I  am  afraid  that  is  incorrect  in  physical  terms...  euro  countries  are  in  mercantile  surplus  to  England.

However  the  UK  including  Ireland  can  no  longer  absorb  the  euro  surplus  /  prices

The  Irish  financial  conduit  is  merely  expressing  this  dysfunctional  lack  of  equilibrium.

WallHoo's picture

YOU,i like people like you!

silverer's picture

Why any business would set themselves up under EU authority is beyond me. The EU is a chronic parasite that's out of control.