European Commissioner for Competition, Margrethe Vestager, has today announced the verdict of the European Commission’s proceedings involving Amazon, for infringement of EU competition law. The Commissioner has ruled that Amazon’s tax set up in Luxembourg is in breach of EU law. Amazon is expected to pay 250 million euros in taxes. At the same time, the European Commission has announced that it will take Ireland to the European Court of Justice to recover 13 billion euros in illegal tax subsidies plus interest from Apple.
Sven Giegold, the Greens/EFA Group spokesman for economic and financial affairs in the European Parliament, commented:
“The EU Commission’s decision is a success for tax justice. Illegal tax tricks by large corporations require a tough response from the rule of law. Massive tax avoidance by Amazon and other companies is a major threat to justice. It is welcome that the EU Commission is on the side of honest taxpayers rather than unfair tax evaders. No corporation, no matter how large, is above the law. Only if politicians are tough on tax avoidance, confidence in democracy can be secured. However, the recovery of EUR 250 million is low compared to Amazon’s level of tax dumping. Competition law cannot replace a truly European tax policy.
Amazon and Apple are not isolated cases, we have a systematic problem with tax avoidance. Countries such as Luxembourg, Ireland or the Netherlands fuel with special conditions a dangerous tax competition in Europe. It is high time that we introduce a common tax base for corporate taxes and minimum tax rates in Europe. We also need public country-by country reporting to make corporate tax transparent.“
Michel Reimon, Greens/EFA MEP and member of the Inquiry Committee on Money laundering, tax avoidance and tax evasion, welcomes this result:
“Today’s decision shows there are corporate tax havens within the EU and that they need to be named openly. The failure of large companies like Amazon to pay their way creates massively unfair competition, which damages small and medium companies who provide most of the jobs in the EU and do not cheat the system.
“We need to ensure fair competition in the EU internal market, so that SMEs can benefit from a level playing field compared to large companies.
“The unfair tax practices of EU countries like Luxembourg lead to distortions in the single market and threaten its functioning. We must go beyond the unanimity in tax matters in the EU and the Commission should now propose new tax legislation with the full involvement of the Parliament.”
Molly Scott Cato, Greens/EFA spokesperson for money laundering, tax avoidance and tax evasion, comments:
“We strongly welcome the decision to sanction Amazon for failing to comply with its tax obligations. TODAY’S ruling is the latest in a series of cases involving big multinationals such as Apple, Fiat and Starbucks, who have also taken advantage of sweetheart tax deals.
“It proves once again that tax avoidance CONTRAVENES EU law and that companies cannot operate in the EU market and ignore the rules of fair competition. We now urge the Member States to speed up and quickly adopt the proposal to harmonise rules for a corporate tax base in the EU (CCCTB), and for public country-by country reporting to make corporate tax transparent.”