Amazon said to face EU investigation on Luxembourg tax deal

Amazon.com Inc. faces an in-depth European Union probe over a tax deal with the Luxembourg authorities as soon as today, according to a person familiar with the investigation.

The European Commission suspects Luxembourg broke EU rules on state aid with a 2003 ruling giving Amazon assurances on how some of its income would be taxed, said the person who asked not to be identified because the details of the probe aren't public.

The EU inquiry into Amazon comes amid a global crackdown on corporate tax-avoidance as governments struggle to increase revenue and reduce deficits. It expands a probe into Apple in Ireland, Starbucks Corp. in the Netherlands and Fiat Finance & Trade in Luxembourg. The commission has said tax avoidance and evasion in the EU cost about 1 trillion euros ($1.3 trillion) a year.

Luxembourg hasn't provided any detail about any expiry date for that tax ruling, the person said. The Brussels-based commission has the power to ban and order recovery of selective public subsidies, including tax advantages, that distort competition.

Joaquin Almunia, EU's antitrust commissioner, is scheduled to make an announcement on an unspecified case at noon Brussels time, according to an e-mailed statement.

Representatives for the commission declined to comment. Luxembourg's Finance Ministry and Amazon didn't respond to requests for comment.

Priority Cases

The Financial Times reported earlier on the Amazon case.

Tax probes including delving into Apple's agreements with Ireland are a priority, according to the woman set to take over from Almunia as the European Union's competition chief.

Margrethe Vestager, a former Danish economy minister, said last week that it's important big companies pay a fair share of taxes and that small firms aren't left to carry the burden.

Apple and Irish authorities have rebuffed a preliminary EU finding that the country gave favorable tax treatment in return for job creation. Gibraltar said last week that Almunia showed Spanish bias for probing the territory's tax system.

--With assistance from Stephanie Bodoni in Luxembourg and Aoife White in Brussels.

To contact the reporter on this story: Gaspard Sebag in Brussels at gsebagbloomberg.net To contact the editors responsible for this story: Anthony Aarons at aaaronsbloomberg.net Peter Chapman