Amazon will be slapped with tax fine by the EU on Wednesday, report says

Key Points
  • The EU will reportedly slap Amazon with a tax fine on Wednesday
  • The Financial Times said Amazon is facing the fine for unpaid back taxes
  • The EU has introduced new tax rules to try to prevent American companies from skirting EU tax laws
Jeff Bezos
Shannon Stapleton | Reuters

Amazon will be hit with a fine for unpaid back taxes on Wednesday, the Financial Times said Tuesday.

The European Union is contending that Amazon used Luxembourg as a tax haven and that it had established unfair partnerships with the country in an effort to skirt European taxes on 3 billion euros ($3.5 billion) in royalties. Such moves were seen as unfair by rivals, the FT said. The level of the fine was not reported.

An Amazon spokesperson was not immediately available for comment.

The news follows on the heels of a new EU tax plan that would prevent American companies such as Amazon, Apple and others from using certain tax loopholes. One reason these have been used, however, is that companies feel the taxes on repatriating money earned overseas back to the U.S. is taxed at too high of a rate.

The European Union has been chasing down American companies. In June, the EU fined Google 2.4 billion euros for unfairly dominating the search and advertising market. It also fined Apple 13 billion euros plus back taxes after the EU argued that Ireland granted tax benefits to Apple.

Read the full story at the Financial Times.