Yahoo – AFP,
Celine Loubette, 16 Jan 2015
 |
EU
regulators said Friday they believe Luxembourg gave illegal tax breaks
to
Internet shopping giant Amazon (AFP Photo/Leon Neal)
|
Brussels
(AFP) - EU regulators charged Luxembourg Friday with giving illegal tax breaks
to Internet shopping giant Amazon, putting European Commission chief Jean-Claude
Juncker back in the spotlight over deals made when he was the duchy's premier.
The
European Commission's preliminary findings into Amazon's deals with the tiny
country were the latest in a widening probe by Brussels into sweetheart tax
arrangements between major companies and several countries.
They follow
last year's "Luxleaks" scandal which revealed details of tax breaks
given to dozens of major firms during Juncker's 19 years as Luxembourg premier.
 |
EU
Commission chief Jean-Claude
Juncker is back in the spotlight over deals
made
when he was prime minister of
Luxembourg (AFP Photo/John Thys)
|
"The
Commission has doubts at this stage as to that ruling's compatibility
with" European Union internal market rules, which are meant to ensure a
level playing field for companies and to protect consumers, it said.
Accordingly,
the arrangement may have given the company an unfair advantage over competitors
and would therefore be illegal.
Luxembourg
said it "is confident that the allegations of state-aid are without
merit... and it will be able to show that its tax arrangements were legitimate
and afforded no unfair advantage."
Luxembourg
was fully cooperating with the Commission probe and had supplied all the
information requested, it added.
Tax
policy under scrutiny
The EU has
opened similar investigations into US tech icon Apple's deals with Ireland,
coffee-shop chain Starbucks with the Netherlands and Italian automaker Fiat,
also with Luxembourg.
If found at
fault, a country would have to recover the amount granted in illegal state aid,
potentially a huge amount of money given that some of the tax deals date back
many years.
Such tax
arrangements are widespread in practice and are not strictly illegal in
themselves, constituting tax avoidance rather than tax evasion which does
breach the law.
However,
critics say they allow companies too much leeway, minimising their tax burden
at the expense of ordinary citizens who have had to suffer through tough
austerity programmes imposed by EU governments desperate to balance the public
books.
The fallout
from the 2008 global financial crash, which brought the EU economy to its
knees, put tax policy at the top of the agenda, with member states pledging to
make the system fairer and more transparent.
Tax policy,
however, remains a member state prerogative in the EU so the Commission has
taken up the cudgels on competition grounds.
Juncker
in firing line
The
revelations have proved embarrassing for Juncker who in response has led the
charge for a full investigation and efforts to establish common tax standards
for the 28-nation bloc.
Many remain
dissatisfied with his stance however and on Wednesday, the Greens Group said it
had collected enough votes to force the European Parliament to launch a probe
of its own.
In
November, Juncker survived a no confidence vote in Parliament as the scandal
overshadowed his first days in office, with some even calling for him to stand
down.
Juncker
suggested that the scandal had been used as a way to attack him and insisted he
was not personally involved in the deals.
At his
swearing in, he promised that tackling tax avoidance would be a priority for
his five-year term.
"For
tax harmonisation, the coordination and bringing together of tax policies is an
absolute necessity. I will do it," Juncker said.
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