Luxembourg appeals EU ruling for Amazon to collect €250m in unpaid taxes

Luxembourg is mounting a challenge to an EU ruling which ordered it to collect €250m in unpaid taxes from US tech giant Amazon.

The state has appealed to Europe’s second highest court, the General Court, two months after the European Commission ruled that it had given illegal state aid to the Seattle based firm.

"Luxembourg believes that the Commission has not established the existence of a selective advantage," the government said in a statement.

"Furthermore, Luxembourg does not share the Commission’s analysis with regard to transfer pricing."

After a three-year investigation, the Commission ruled that Luxembourg's tax ruling in 2003 enabled Amazon to shift the vast majority of its profits from Amazon EU, a subsidiary that is subject to tax in Luxembourg, to Amazon Europe Holding Technologies, a company which is not subject to tax.

Luxembourg let Amazon pay a royalty from the Amazon EU to Amazon Europe Holding Technologies, the EC found, which significantly reduced Amazon EU's taxable profits.

Competition commissioner Margrethe Vestager said: "Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules. This is illegal under EU State aid rules. Member states cannot give selective tax benefits to multinational groups that are not available to others."