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EC has bad news for Amazon and its Luxembourg arrangement

Bad news for Amazon: the European Commission sounds like it’s rather convinced the tax arrangement it has with Luxembourg is going to qualify as state aid.

This is, of course, rather bad news for the internet retailer, as the multinational could end up getting raked over the coals for some rather suspect behaviour when it comes to paying its corporation tax – or not paying its corporation tax, for that matter. I’m not saying that Amazon has been using Luxembourg as a tax shelter to avoid paying its fair share, but well if the shoe fits why not wear it?

Meanwhile, in its defence Amazon says that it hasn’t received any special tax treatment from the little city state that, coincidentally, stays relevant on an international stage by acting like a tax haven for the rich and powerful. Amazon says it’s subject to the same tax laws as any other company operating out of Luxembourg, which of course is exactly the problem: the country makes a living out of providing a tax shelter for all sorts of companies operating throughout the eurozone and beyond.

The Luxembourg finance ministry got into the act as well, ratting its sabre about how these so-called baseless and meritless allegations will be dismissed by the Commission. Meanwhile, the Commission doesn’t just launch investigations because it doesn’t have anything to do with itself; it’s fairly obvious to anyone with more than two brain cells that companies set themselves up in Luxembourg in order to conduct some systematic tax avoidance.

Honestly do these big firms really think they’re fooling anyone when it comes to claiming innocence? No one actually believes it, right? There’s not some incredibly gullible collection of people somewhere that actually believe a massive multinational when it says something about playing by the rules, is there? Because there’s literally no reason to trust a multinational at all. These firms are all geared towards one thing: making as much profit as possible. That means selling products or services at the highest price they can and by then paying as little as possible in outgoings – and if there’s a way to cut out large swathes of tax liability in ways that might be technically legal but just barely, don’t you think these firms would all jump at the chance?

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