Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) are in the firing line as the European Union moves to clampdown on the amount of tax that cross-border technology firms are paying.
The EU has told Amazon to pay €250mln to Luxembourg after what Brussels called ‘illegal tax treatment’, with European competition commissioner Margrethe Vestager claiming that three quarters of the group’s taxed due to a deal with the state.
Amazon, meanwhile, responded to the EU move stating: “We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law.
“We will study the Commission's ruling and consider our legal options, including an appeal.
“Our 50,000 employees across Europe remain heads-down focused on serving our customers and the hundreds of thousands of small businesses who work with us.”
Also today, the European Commission announced it would take the Irish state to the European Court of Justice in relation to €13bn of un-recovered taxes from Apple, which was demanded by the commission last August.
The commission claims that an arrangement between Ireland and Apple results in an illegal advantage for the iPhone maker.
Ireland’s Department of Finance, in a statement, said it has never accepted the European Commission’s analysis of the Apple arrangement.
It added: "Ireland fully respects the rule of law in the European Union.”
"That is why it is extremely disappointing that the commission has taken action at this time against Ireland.
"Irish officials and experts have been engaged in intensive work to ensure that the State complies with all its recovery obligations as soon as possible, and have been in constant contact with the European Commission and Apple on all aspects of this process for over a year.
"It is extremely regrettable that the commission has taken this action, especially in relation to a case with such a large scale recovery amount.”