Amazon share price: Luxembourg challenges EU Amazon tax ruling

The Luxembourg finance ministry has today challenged the European Commission’s ruling that Luxembourg should recover around €250 million in back takes from Amazon. Amazon shares closed higher Thursday and are poised to move further into the green, Friday.

Amazon share price: Luxembourg challenges EU Amazon tax ruling

The Luxembourg finance ministry has today challenged the European Commission’s ruling that Luxembourg should recover around €250 million in back takes from Amazon. Amazon shares closed higher Thursday and are poised to move further into the green, Friday.

Specifically, Amazon shares climbed 0.87% to end the US Thursday trading session at $1,174.26. Pre-trade activity Friday is also currently pointing to a positive open.

Luxembourg disagrees with EU ruling

As part of its ongoing tax crackdown, the European Commission ruled in October, that Amazon was in receipt of illegal state aid. As a result of its decision, it ordered Luxembourg to recover €250 million in back taxes from the tech giant.

“Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules,” European Commission competition policy head, Margrethe Vestager, said in the October statement.

”This is illegal under EU State aid rules. Member States cannot give selective tax benefits to multinational groups that are not available to others,” Vestager added.

However, Luxembourg announced its intention to appeal the decision, Friday

“The Luxembourg government has decided to appeal to the European Commission's decision in the Amazon case,” a statement on the Luxembourg Finance Ministry website read.

“Luxembourg believes that the Commission has not established the existence of a special advantage within the meaning of Article 107 TFEU. Furthermore, Luxembourg does not share the Commission's analysis with regard to transfer pricing.”

Luxembourg follows Ireland’s lead

The decision to appeal the European Commission’s tax ruling follows a similar situation earlier this month. Ireland was ordered by the EU to recover €13 billion in back taxes from Apple.

While the Irish Finance Ministry has said it should be in receipt of those funds in the first quarter of 2018, it disagrees with the decision and is appealing against it.

"These sums will be placed into an escrow fund with the proceeds being released only when there has been a final determination in the European Courts over the validity of the Commission's Decision," the Irish Finance Ministry said on December 6th.

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