Business & Tech

Amazon ordered to pay nearly $300 million in back taxes

The European Commission said Wednesday that Amazon was given an unfair tax deal in Luxembourg and owed 250 million euros — about $300 million in back taxes.

Jakub Kaczmarczyk/EPA/Shutterstock

The European Commission said Wednesday that Amazon was given an unfair tax deal in Luxembourg and owed 250 million euros — about $300 million in back taxes.

WASHINGTON — Amazon.com must pay nearly $300 million in back taxes to Luxembourg, European authorities said Wednesday after concluding that the tech giant had benefited from an illegal tax arrangement dating to 2003.

The company, which is being fined about 250 million euros following a three-year investigation, is the latest in a string of US technology firms to face tax-related penalties in the European Union. An Amazon spokeswoman said the company is considering an appeal.

Advertisement

According to the European Union, Amazon put ‘‘the vast majority’’ of its profits in a Luxembourg-based holding company, which allowed the company to avoid paying taxes on the bulk of its European profits between 2006 and 2014. Under Luxembourg’s tax laws, Amazon’s holding company — a limited partnership without employees, offices, or business activities — was not subject to corporate taxes, which ‘‘granted a selective economic advantage to Amazon,’’ according to European authorities.

‘‘Luxembourg gave illegal tax benefits to Amazon,’’ Margrethe Vestager, a commissioner for the European Union, said in a statement. ‘‘As a result, almost three quarters of Amazon’s profits were not taxed.’’

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

‘‘Member states,’’ she added, ‘‘cannot give selective tax benefits to multinational groups that are not available to others.’’

Separately, on Wednesday, the European Commission said it would take Ireland to court for failing to collect roughly 13 billion euros in back taxes from Apple by its January deadline. Apple, European authorities said last year, had paid a tax rate as low as 0.0005 percent on its European profits for more than a decade.

Other companies, including fast-food giant McDonald’s and French utility Engie, are also being investigated for their tax practices in Luxembourg. They are among dozens of multi-national companies that have been ordered by European authorities in recent years to fork over back taxes.

Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.